Compared with a registered open-end mutual fund, a hedge fund typically:

a.Offers daily redemption at NAV to all investors
b.Is subject to the same strict leverage limits as a 1940 Act fund
c.Uses aggressive strategies, may employ leverage and short selling, and often imposes lock-up periods
d.Is prohibited from charging performance-based fees

Giải thích

Hedge funds pursue aggressive, flexible strategies that can include leverage, derivatives, and short selling, and they frequently charge performance-based fees and restrict withdrawals through lock-up periods. Because they are lightly regulated and can be illiquid and high-risk, they suit only sophisticated investors, unlike heavily regulated mutual funds.

Trích dẫn luật: Securities Act of 1933

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