Self-directed Plans – Individual Retirement Accounts (IRAs)
Free Investment Professional Background Check
Pay Off Credit Cards or Other High Interest Debt
Initial Coin Offerings (ICOs) and Cryptocurrencies
Mutual Funds and Exchange-Traded Funds (ETFs)
Smart Beta, Quant Funds and other Non- Traditional Index Funds
Hedge funds pool money from investors and invest in securities or other types of investments with the goal of getting positive returns. Hedge funds are not regulated as heavily asmutual fundsand generally have more leeway than mutual funds to pursue investments and strategies that may increase the risk of investment losses. Hedge funds are limited to wealthier investors who can afford the higher fees and risks of hedge fund investing, and institutional investors, including pension funds.
What should I know if I am considering investing in a hedge fund?
You generally must be anaccredited investor, which means having a minimum level of income or assets, to invest in hedge funds.
Read a funds prospectus and related materials.
Make sure you understand the level of risk involved in the funds investment strategies, and that the risks are suitable to your personal investing goals, time horizons, and risk tolerance. As with any investment, the higher the potential returns, the higher the risks you must assume.
Hedge funds may hold investments that are difficult to sell and may be difficult to value. You should understand the valuation process and know the extent to which a funds holdings are valued by independent sources.
Fees impact your return on investment. Hedge funds typically charge an asset management fee of 1-2% of assets, plus a performance fee of 20% of the hedge funds profit. A performance fee could motivate a hedge fund manager to take greater risks in the hope of generating a larger return.
Understand any limitations on your right to redeem your shares.
Hedge funds typically limit opportunities to redeem, or cash in, your shares, to four times a year or less, and often impose a lock-up period of one year or more, during which you cannot cash in your shares.
Make sure hedge fund managers are qualified to manage your money, and find out whether they have a disciplinary history within the securities industry.
You can get this information by reviewing the advisersForm ADV, which is the investment advisers registration form. You can search for and view a firms Form ADV using the SECsInvestment Adviser Public Disclosure(IAPD) website.
If you dont find the investment adviser firm in the SECs IAPD database, call yourstate securities regulatoror searchFINRAs BrokerCheck database.
You are entrusting your money to someone else. You should know where your money is going, who is managing it, how it is being invested, and how you can get it back. In addition, you may wish to read FINRAsinvestor alert, which describes some of the risks of investing in funds of hedge funds.
Investor Bulletin: Form ADV-Investment Adviser Brochure and Brochure Supplement