Hedging Techniques In The Asset Management

In 1949, first Hedge Fund was launched by Alfred Jones. From then, Hedge Funds get quickly developed. Today Hedge Funds managed 900 billion dollars. Hedge Funds characterized as high yields and low correlation-coefficient with traditional assets. Accompany with the burst of the burble of the internet. More and more investors step into Hedge Funds. Traditionally, Hedge fund was looked as an extreme yield generator and set out as a special asset. Thus during portfolio construction, many managers set Equity and Bonds at the core position and the additionally add some Hedge Funds as absolute Alpha.However, now more and more research shows that hedge funds are not only Alpha generator, but mostly a beta. Because Hedge Funds face not only traditional market risk but also many other risk like Volatility risk, credit risk Foreign exchange risk, etc. Building on this new knowledge about Hedge Funds, we can set up our portfolio in new way. That is set Hedge Funds as an actively overlay to a passive portfolio and additionally add some alternative...