Something like a hedge fund at Interactive Brokers?
- Thread starter Sam Mcgee
- Start date
Sam: ETFs are in no way similar to hedge funds. They simply mimic an index. QQQ replicates the Nasdaq 100, for example. Hedge funds are groups that generally trade actively, and hopefully make more money than the market as a whole. Your money is pooled with others to finance them and you get a piece of the P/L.
Here's a web page I just found:
http://registeredrep.com/ar/finance_hedgelike_funds_mr/
The funds are kind of what I was looking for. Whether they are easy for me to purchase or if their performance is as good as some of the better hedge funds with a high minimum is another question.
http://registeredrep.com/ar/finance_hedgelike_funds_mr/
The funds are kind of what I was looking for. Whether they are easy for me to purchase or if their performance is as good as some of the better hedge funds with a high minimum is another question.
a while back Jim Rogers mentioned a fund where he was on the board of directors. He said it went both long and short. The first letter started with a V and I think Marty Zwaig was associated with it. That is all I remember. Wish I had written the symbol down. You can email Rogers and he will probably give you the symbol.
Hey Sam, the ETF's offered on the exchanges are not mixed long snd short. The Holders, Iunits etc...are baskets of issues that have been legally structured for trade on the exchanges. Some give dividends and interest. These ETFs subject you to less capital gains liability (on later in the year purchases if held over year end) than most mutual funds because of low turnover. You can obviously buy/ sell them any time during market hours. The ability to go long or short allows you to set up you own sector based "hedge fund" by grouping them to you liking.
Most hedge funds in Canada are limited partnerships that request a declaration of means on the offering. This protects the widow and orfans from surrendering their last 150 grand to rapacious hedgies. Just lie on the form about your million bucks...nobody checks...you might have trouble suing them if they lose your money :>). The limited partnership is more tax efficient especially if you buy at the end of the year ...your initial purchase is basically your ACB.
One thing to consider is the performance bonus they bake into the offering. Often 20 % of any profit above a given index. Imagine giving 150 grand to a hedge that put it into bonds in an interest rate reduction cycle and then used the SP as a performance measure. If the SP dropped say 10% that year but bonds went up 10 % you could pay 20% of the difference in fees on top of the MER , depending on the contract wording. You might say " well I still made money and I expect the hedgy to move the money as they see fit" but I could see a fund structuring it's initial offering to maximize the bonus potential.
Some hedge funds have lock up periods of up to six months (ie..Sprott) and only value the partnership monthly and penalize you for early withdrawal.
I guess you have to hope that the fund manager is quicker and smarter by perhaps 20% than you are.
Most hedge funds in Canada are limited partnerships that request a declaration of means on the offering. This protects the widow and orfans from surrendering their last 150 grand to rapacious hedgies. Just lie on the form about your million bucks...nobody checks...you might have trouble suing them if they lose your money :>). The limited partnership is more tax efficient especially if you buy at the end of the year ...your initial purchase is basically your ACB.
One thing to consider is the performance bonus they bake into the offering. Often 20 % of any profit above a given index. Imagine giving 150 grand to a hedge that put it into bonds in an interest rate reduction cycle and then used the SP as a performance measure. If the SP dropped say 10% that year but bonds went up 10 % you could pay 20% of the difference in fees on top of the MER , depending on the contract wording. You might say " well I still made money and I expect the hedgy to move the money as they see fit" but I could see a fund structuring it's initial offering to maximize the bonus potential.
Some hedge funds have lock up periods of up to six months (ie..Sprott) and only value the partnership monthly and penalize you for early withdrawal.
I guess you have to hope that the fund manager is quicker and smarter by perhaps 20% than you are.
Thanks for the tip cashola, I was thinking of doing that, just checking off the question about the million dollars to become an accredited investor. Guess I'm going to be a millionaire a little sooner than planned. Do you think the auditor will believe me if I tell him our Beanie Baby collection is worth several hundred thousand and my 10 year old pickup truck is a classic?