Overview of how hedge funds are different than mutual funds. Created by Sal Khan.
Finance and capital markets on Khan Academy: Hedge funds have absolutely nothing to do with shrubbery. Their name comes from the fact that early hedge funds (and some current ones) tried to “hedge” their exposure to the market (so they could, in theory, do well in an “up” or “down” market as long as they were good at picking the good companies). Today, hedge funds represent a huge class investment funds. They are far less regulated than, say, mutual funds. In exchange for this, they aren’t allowed to market or take investments from “unsophisticated” investors. Some use their flexibility to mitigate risk, other use it to amplify it.
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So Harvard grads, trust fund kids, etc…
Seems to me a hedge fund is better because the manager is trying to beat the market. A regular mutual fund is not incentivized to beat the market , they just want more money coming in from investors. You might as well put your money in a S&P 500 index fund rather than a mutual fund.
please update your information in this video.
Great video!
This video is already OUTDATE, Mr. Khan.
Let me ask a question. Let's say I want to open a real estate investment fund. We are going to do a $10M fund to invest in 2 different multifamily projects as institutional investors. The sponsors/operators of those projects already charge asset management fees for the project itself, so, how do we, as the investment company/institutional investor, charge our management fees to our investors as well? Do we negotiate with the sponsor for them to charge a lower fee, do we simply charge our fees and if the numbers make sense, they make sense and that's it? I guess my question would be; In many investments institutional investors make, they are not necessarily the managers of the investment itself, there's another company actually managing the day-to-day operations, and the investment fund/institutional investor simply deploys that capital to the deal and "manages" the investor' money, but not the asset… Is this something that happens and it's completely normal? And if so, how do you structure that and the fees and everything?
Why dont people just invest in pamm/mamm accounts?
Sal… thanks for this one! 👍🍺
So the Hedge fund management is just like private equity firms?
IS THERE ANYTHING THIS MAN DOESNT KNOW??