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How does a hedge fund make me money?

How does a hedge fund make me money?

Investing
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Hedge funds come in a large variety of forms. There are long/short funds; long only; commodity funds; distressed real estate funds; real estate  funds; etc. The concept is to "hedge" or reduce risk. For example a long/short fund might be structured with 150% long; 70% short giving a net long exposure of 80%. In theory, it will trail the market but provide a cushion during times when the market turns down like it did September 2018 to December 2018. If you find the right fund they might make money on both the stocks bought long and the stocks shorted. I believe many are more conservative than a regular long only stock, ETF or mutual fund portfolio.

The way in which you make money for most hedge funds is you get to keep 80% of the profits that the fund earns. 

You can sometimes find an advisor who runs a long/short indivual account with only a profit share and no management fee. Look for advisors that publish their returns on their website. There are not many, which in itself says something about how well advisors will make money for you. 

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