02-01 So you want to be a hedge

ETF

• Buy/sell like stocks
• Baskets of stocks
• Transparent, liquid

Mutual Fund 共同基金

• Buy/sell at end of day
• Quarterly disclosure
• Less transparent

Hedge Fund

• Buy/sell by agreement
• No disclosure
• Not transparent

Large cap 大盘
sharesprice = 市值
Assets Under Management，AUM 资产管理规模

Incentives: How are they compensated?

ETFs: Expense Ratio
Mutual Funds: Expense Ratio
Hedge Funds:"Two and Twenty": AUM 20%portfolio"
100 million dollar >> 115 million dollar
Two: 100m * 0.02 = 2m
Twenty: 15m * 0.2 = 3m
total: 5m

How funds attract investors?

Who?

• Individuals
• Institutions (often 公益机构)
• Funds of funds

Why?

• Track record
• Simulation and story
• Good portfolio fit：如果你的基金是关于指数的，而投资者已经投了这个指数，那么ta可能就不会选择你了。

Goals

• Beta benchmark >> SP500
• Absolute return >>long/short

Metrics

• Cumulative return
• Volatility
• Risk/Reward