HFR Crypto Currency Index shows that hedge funds gained 1641% till November 2017, while Ethereum hedge fund registered a staggering growth of 6578% during the same period. This sterling performance of hedge funds can be attributed to their distributed investment in ICOs that combine some key aspects of digitized tokens with those of the crowdfunding. Despite their unclear legal status, ICOs have shown tremendous growth, because they are denominated in Ether, the platform that has gained more than 6000% price rise during the year 2017.
How the story began..
Hedge funds originated to help the investors minimize risks and achieve reliable returns over the time, leveraging diversified investment portfolios. Through the years, hedge funds have evolved from merely an investment vehicle for the rich and affluent, to a robust financial tool for the university endowments, state and corporate pensions, non-profit foundations, institutional investors and other individual investors.
Their market-neutral and balanced approach to investment portfolios of varied instruments help the investors of hedge funds get positive returns
How portfolio diversification helps in hedge funding?
Here the key benefits of investing in diversified portfolios for greater gains over the long and short periods of time.
As an investor, you need not rely on simple strategies that are weighted heavily towards fixed income assets.
Diversification of portfolio provides an additional layer of risk management to the crypto investors. They need not be overly focused on a specific asset. Diversification serves as a buffer should something unexpected happens to a stock.
In today’s digitalized marketplaces where bitcoin and other crypto currencies are gaining wider adoption, diverse and nimble investment portfolios provide the opportunities to the investors to maximize the profits, all the while minimizing the risks.
Hedge funds serve the below two purposes for the investors:
Net higher returns
Diversification
Crypto hedge funds allow the investors to invest in a wide range of underlying securities. Cyrpto hedge funds can be broadly divided into two categories:
Those that manage the portfolios for some exclusive crypto currencies
Those that have added crypto currencies like Bitcoin, Ethereum, Litecoin, Zcash etc. to a mix of other asset types.
The former crypto hedge funds achieve maximized returns by adding the newly launched Initial Coin offering or ICO to its mix of investments, while the latter is undoubtedly more risk-proof, but relatively provides less returns.
Blockchain to back the funds securely
While the early adopters of Bitcoin are already millionaires, those new to the crypto-centric investments are still ahead of the curve. Those investors who believe in the prowess of technology but still do not want full exposure to the relatively new and volatile marketplace of cryptocurrencies find a perfect match to their expectations in a crypto hedge fund, like the one operated by HedgeConnect. Having a portfolio of stable crypto currencies backed by the power of blockchain technology is the right way to go. The performance of the hedge funds in the recent years has displayed that the weak hands sell at their own risk, and often face losses.
A perfect choice for diversified portfolio investment in digitalized markets
With the impressive performance of crypto hedge funds in the recent past, and the increasing adoption of crypto currencies that provide decentralized monetary exchanges without the involvement of traditional banking systems and government regulations, a large number of millennial are now opting to “unbank” themselves. They prefer to keep their money in crypto currency exchanges, rather than parking it in a bank account with little returns. However, while keeping the money in a single exchange could always be dangerous. In such a situation, hedge funds like HedgeConnect provide a perfect middle ground between the largely unregulated crypto world and the highly regulated banking system.
Timely strategy is crucial
A timely strategy is critical to get more profits from hedge fund investments. You can reasonably expect higher returns from your hedge fund investment if you pick up a timely strategy or have a seasoned Hedge Fund Manager to assist you. Fund Managers at HedgeConnect provide specialized services to the investors to let them gain maximum returns from their investments. HedgeConnect fund managers achieve this by endlessly analyzing the performance of assets, and taking re-balancing measures when necessitated in the best interest of the investors.
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