ETF Database – Over the past several weeks, markets have become increasingly choppy as a number of issues are plaguing the global economy. America teeters on the brink of a recession while debt downgrades and slumping investor confidence have rattled European markets as well. Meanwhile, in emerging markets, inflationary concerns are continuing to wreck havoc leaving investors with few places to put cash to work. In light of this uncertain environment, many market participants have dialed back risk levels, focusing in on sectors that have low levels of correlation to broad markets, such as hedge funds.
While many might think of hedge funds as some sort of ultra-high risk ”black box” type investment, that is not really the case for many products in the space. Instead, hedge funds should be thought of as a way to play broad markets with lower levels of risk. In fact, hedge funds will often take different sides of trades in highly correlated assets seeking to squeak out returns that beat out the market but with much lower levels of volatility [Now Screen For Alternatives (such as Hedge Funds) with our ETF Screener].
