Hedge funds are NOT highly speculative. This is a misconception which originated at a time when hedge funds were an elite vehicle available only to the wealthy and influential. Only investors with $1Million at their disposal were accepted as members of the exclusive club of the hedge fund investment world. This eligibility requirement along with the fact that hedge funds are not subject to the same regulatory authority as other investments created a great deal of speculation about the products and their fallibility.
Today, this misconception is no longer considered by the hedge fund world. In many cases hedge funds can actually reduce risk and volatility in a traditional portfolio. Furthermore, because hedge funds are able to use a significantly greater number of financial instruments they are able to achieve significantly higher gains than traditional investment funds are able to achieve.
Following the adage that one should not put all eggs in one basket, Xtentus Ltd. discourages investors from placing all their assets in a managed future account. Managed futures or forex account should be used as a powerful and effective diversification instrument within a traditional portfolio and in combination with other investments.
In order to reduce the risk and increase returns, an investment of up to 20 % as part of a traditional investment portfolio is recommended based on the XTENTUS Risk Evaluation.
Managed accounts differ from traditional investment in many ways. Managed accounts have a single goal – to achieve gains in rising as well as declining markets. The Trading advisor and fund managers are allowed to make use of all existing financial instruments to achieve these gains. Today, 8500 hedge funds exist worldwide and manage capital worth more than 1’000 billion USD. In comparison, the market capitalization of all US stocks amounts to 16,186 billion USD - about 16 times as much.