Qualified advisers answering your
Financial Questions
call 0800 092 1245

Are the hedge funds next to fall?

It has been suggested that while the worldwide banking system is starting to stabilise again, we may be in for further shocks in the financial industry. If predictions are correct there are a number of high profile hedge funds on the verge of going under and once the first one goes we could see a number of others taken down at the same time.

While traditionally hedge funds have been associated with taking short positions, this is not all that they do, although when they decide on an investment they will normally take very large positions, possibly using debt to fund part of the purchase. We have seen some major shifts in the currency and oil markets of late which may be part of the reason why they appear to be so weak.

The problem is that in order to give themselves the opportunity of large returns they will often use whatever means and assets available go gear up the fund as a whole. This means that for every £1 put into a traditional hedge fund this will be increased by gearing which works on the upside, but can decimate them on the downside.

Just when we all thought it was getting better we may have to think again!

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details