Hedge fund like mutual funds

Do you have a million dollars in your back pocket, or $200,000 a year in income? If not, you can't qualify as an accredited investor according to the SEC, and it means you are completely shut out of investing in hedge funds.

Hedging is a strategy of investing in a manner to limit risks. If you are long on a stock, you are totally at the mercy of the stock going to zero. If however, you also went short on the same stock you would limit your risk since the investment would go up in a downturn.

Hedge funds have been notoriously famous as the rich people's investment vehicles. Hedge fund managers are famous for their over the top salaries partly because they bust their behinds trying to maximize returns for their investors. Unlike traditional mutual funds which have a SEC limitation of not holding more equities short than long, hedge funds are kinda under-regulated allowing hedge fund managers to adopt aggressive strategies to make money.

New mutual funds have popped up recently that adopt hedge fund like strategies (long/short, market neutral, arbitrage). The following chart shows the different hedge-fundish mutual funds compared to JDVBX (a somewhat conservative mutual fund)

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