Summary
A fund's income and realized capital gains are distributed to shareholders, while unrealized capital gains are reflected in higher mutual fund share prices. Anyone can buy mutual fund shares, but hedge fund shares are generally available only to "qualified investors," defined by an annual income of at least $200,000 and financial assets of $1,000,000. [...] both hedge fund investors and mutual fund investors come out on the short end of this regulation.
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The Mystique of Hedge Funds
Hedge funds are controversial these days. Though it's unlikely that the average citizen or the average congressman could say just what hedge funds do, many are certain they must be reined in by additional regulation because they can - and do - cause widespread damage to our financial system. Almost everyone takes it for granted that regulation of some sort is the solution, ignoring the possibility that at least some of the problems are actually caused by regulation.
What is a hedge fund? The name implies hedging, a strategy that redu...See the full content of this document
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