Hedge-Like Mutual Fund

DEFINITION of 'Hedge-Like Mutual Fund'

A mutual fund that adopts an alternative investment strategy, much like a hedge fund. Hedge-like mutual funds aim to increase investor returns by utilizing investment methods typically used by hedge funds, while maintaining the convenience and availability to investors wishing to invest in mutual funds. The key differences between hedge-like mutual funds and hedge funds are that hedge-like funds are regulated by the SEC, and potential investors in hedge-like funds do not need to be considered accredited investors to invest.

BREAKING DOWN 'Hedge-Like Mutual Fund'

Hedge-like mutual funds can use many different alternative strategies to be considered hedge-like. For example, a hedge-like mutual fund may employ a long-short strategy, or a market neutral strategy in order to achieve better than benchmark returns. These funds are not typically able to use excess leverage in their strategies due to their regulatory status under the SEC, whereas hedge funds are not under the same restrictions.

RELATED TERMS
  1. Mutual Fund Yield

    Dividend payments divided by the value of a mutual fund’s shares. ...
  2. Fund Supermarkets

    An investment firm or brokerage that offers investors a wide ...
  3. Mutual Fund Custodian

    A trust company, bank or similar financial institution responsible ...
  4. Open-End Fund

    A type of mutual fund that does not have restrictions on the ...
  5. Flexi-Cap Fund

    A type of mutual or hedge fund that is not restricted to investing ...
  6. Global Fund

    A type of mutual fund, closed-end fund or exchange-traded fund ...
Related Articles
  1. Retirement

    The Rise Of The Hedged Mutual Fund

    Discover these growing funds, which were previously unavailable to the average investor.
  2. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  3. Mutual Funds & ETFs

    Taking A Look Behind Hedge Funds

    Hedge funds can draw returns well above the market average even in a weak economy. Learn about the risks.
  4. Mutual Funds & ETFs

    Are Hedged Mutual Funds For You?

    Long the purview of institutional investors and ultra-wealthy individuals, financial services firms are making alternative investment strategies available to a wider audience of investors. Understanding ...
  5. Investing

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  6. Mutual Funds & ETFs

    Mutual Funds Are Awesome - Except When They're Not

    This investment is very popular, but that doesn't mean it comes without risk.
  7. Mutual Funds & ETFs

    Mutual Funds: What Are They?

    The Definition A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money ...
  8. Mutual Funds & ETFs

    When To Buy A Mutual Fund

    There is money to be made in mutual funds, but investors fall into several pitfalls that keep them from maximizing their profits. Read these tips to take the uncertainty out of investing in mutual ...
  9. Mutual Funds & ETFs

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
  10. Retirement

    A Brief History Of The Mutual Fund

    This popular investment vehicle has seen its share of ups and downs, successes and scandals. Read all about it!
RELATED FAQS
  1. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
  2. What does a hedge fund do?

    Read how hedge funds differ from other investment vehicles and how their investment strategies make them unique and potentially ... Read Answer >>
  3. How much of a company's stock can a mutual fund own?

    There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
  4. Why don't mutual funds trade like stocks?

    Learn how mutual funds differ from exchange-traded funds (ETFs) in how they are traded. Also, learn what fees are involved ... Read Answer >>
  5. How do hedge funds determine what assets to own?

    Learn about the various types of investments that hedge fund managers use, and explore basic hedge fund management trading ... Read Answer >>
  6. Where does a hedge fund get its money?

    Learn how a hedge fund is structured and how the managing partner of the fund goes about the process of finding and soliciting ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center