Investing in Mutual and Hedge Funds

Customers often invest in mutual and hedge funds to grow their savings and diversify their portfolios. There are many advantages to investing in mutual funds, including convenience, professional portfolio management, and liquidity. Canadian hedge funds also offer advantages such as broader diversification, enhanced returns, reduced volatility risk, and others.

Hedge Funds, Types, and Factors

There are different types of investment vehicles, including equity, event driven, relative value, and others. There are also market-neutral and long-short funds whereby the former is a sub-type of the latter. When choosing a financial product, seasoned investors consider factors such as minimum monthly returns, annualized standard deviation, Sharpe ratios, and others. There are different strategies to maximize your returns, including relative value arbitrage, long/short, short only, long only, and market neutral. Investors also use statistical models, event-driven strategies, and equity arbitrage. They buy low-priced bonds or distressed debt as well.

Mutual Funds, Varieties, and Pros and Cons

When it comes to mutual funds Canada based investors have plenty of options to consider. There are different types of funds such as exchange-traded, open-end, unit investment trusts, and closed-end funds. There are many benefits to using mutual funds, and the main ones are ease of comparison and government oversight. When it comes to downsides, the main ones are unpredictable income, lack of control, and finance charges. Manulife mutual funds come in different types and help investors to build wealth.

Trust Funds

A trust fund is a type of investment vehicle that combines different assets. These funds are established to offer benefits to organizations and individuals, including non-for-profits, charitable organizations, grandchildren, and children. Trusts come in different varieties, including charitable remainder, charitable, grantor, complex, and others. The money invested in a trust fund can be used for different purposes, including college expenses, room and board, living expenses, and others. One benefit for holders is that the assets are often exempt from gift and estate taxes. On the downside, customers pay attorney fees and setting up a trust can cost a few thousand dollars.

Index Funds for Portfolio Diversification

Index funds are also known as index trackers and feature investment portfolios that track or match certain market indexes. There are different varieties, including funds such as target date, balanced index, commodity index, and others. A commodity fund is one type that follows commodities futures or markets. This option is suitable for novice investors given that the commodity markets are risky and complex. Other types include combination, natural resource, and funds that hold futures. Natural resource index funds, for example, invest in different sectors and fields, including agriculture, oil drilling, mining, and others. The main benefits to investing in Canadian index funds include low turnovers, simplicity and convenience, and low investment costs.


Exchange traded funds hold different types of assets, including bonds, commodities, and stocks. Most funds track indexes such as bond and stock indexes. There are different types of etf, including leveraged, inverse, stock, index, and exchange-traded grantor trusts. Other varieties include actively managed, currency, and commodity ETF's. When choosing an investment vehicle, there are different factors to take into account, including counterparty and regulatory risk, taxation, and brokerage commissions. Ishares is one option that offers a selection of exchange traded funds and allows investors to save for retirement and manage risk and volatility. Exchange traded funds invest in international and global bonds, US bonds, international and domestic stocks, real estate, and commodities. Funds invest in different sectors of the economy, including technology, healthcare, and finance. Funds also invest in small, mid, and large caps, as well as municipal, short duration, and inflation bonds. They focus on both developed and emerging markets. There are asset allocation, factor investing, equity and dividend, and other ETFs. Hedge funds and asset managers often invest in etf to diversify their portfolios, increase revenues, and minimize risk.

Investment Banking

Investment banks serve government entities, big businesses, and individual investors and underwrite equity and debt securities. They offer services to investors, financial and educational institutions, healthcare providers, municipalities, corporations, and other entities. The goal is to help customers to improve liquidity, manage investment risk, and raise capital. Institutions that specialize in investment banking offer unsecured debt securities, corporate finance advisory, and advice on mergers and acquisitions. Financial advisors who specialize in investment banking offer sophisticated solutions and advice on international and domestic transactions, including takeover defenses, acquisitions, and leveraged buyouts. They also offer advice on exchange offers, divestitures, spin-offs, joint ventures, recapitalizations, and corporate restructurings. Investment bankers execute private and public placements of debt and equities and help customers to mitigate and manage market, credit, and strategic risks. They operate on the synthetic, security, and cash markets and specialize in collateralized debt and commercial-backed and residential mortgage-backed securities. Finally, investment bankers offer advice on debt and securitization opportunities and engage in loan purchase activities.