Hedge funds can be referred as skill based investment strategies which get returns from the exclusive strategies/ skills of the trader. These privately offered investment vehicles involve high net worth individuals who invest in a portfolio of diverse assets which can include along with traditional investments into stocks and bonds, commodities futures contracts and derivatives.   

As hedge funds offer the ability to make money in both a rising market as well as a falling market they offer an uncorrelated to equity or bond market return advantage. In these funds, trader skill plays a very important role as the Hedge funds need to be managed regularly and actively.  It has been observed that Hedge fund returns are also widely actuated by changes in credit, market volatility or other market factors. Therefore, one’s returns can be referred as a blend of manager skills and return based on their strategy.

Investors should remember that every hedge fund return series follows its own approach for manager selection, investment style and performance target. According to Richard Cayne in Thailand, one of the important advantages of Hedge funds is that it provides returns which are NOT based on equity market direction.   This can be a very attractive way to reduce volatility in ones portfolio and increase the return of it at the same time.  

There are immense benefits of Hedge funds and writing them all in one short synopsis is nearly impossible. However to begin with, let us say that Hedge funds possess the capability of reducing risk of portfolio volatility and provide for potential portfolio returns in those economic conditions where bond investments or traditional stocks provide confined opportunities. Hedge funds can help their investors participate in a wide array of newer financial products and markets.   Richard Cayne having worked in Tokyo Japan for over 15 years and as financial advisor at Meyer Asset Management Ltd comments how Japanese have a strong liking to hedge funds.  While it is true that hedge funds can make money in falling markets they can loose as well and so Richard cautions investors both Japanese and international alike to really understand how that respective fund will make money and under what conditions.

Hedge funds can be open-ended and that’s why the investors are able to invest with a certain amount of liquidity which may vary depending on the type of fund or investment pool.  For example a hedge fund with investment into real estate should be less liquid than one that invests into foreign exchange which is a much more liquid asset class.  Hedge funds can have lockups that range from monthly to yearly or longer so investors must look into if this fits into their liquidity needs.

Meyer Asset Management Ltd.’s Asian based servicing arm Meyer International Ltd in Bangkok opines that the most significant benefit of using Hedge funds is that these funds possess the ability of providing positive and profitable returns in different market environments regardless of equity of bond market returns. Another important reason behind popularity of Hedge funds is that these funds have the potential of decreasing the long term portfolio risk with the help of additional asset classes. That’s why those looking for low risk and high returns can always take help of Hedge funds.  

According to Richard Cayne Meyer International in Bangkok, adding Hedge funds to a financial investment portfolio results in more robust diversification to a traditional stock and bond portfolio. Hedge funds also provide much greater flexibility and ability to benefit from various global markets.

For more resources regarding Richard Cayne or even about Richard Cayne Meyer International and especially about Richard Cayne Meyer Asset Management Ltd please review these pages.