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Investing in hedge funds

Hedge funds are investment funds. However, unlike regular investment funds, hedge funds use more strategies to achieve returns.

Investing involves risks. You could lose (some of) the money you invested.

Advantages and disadvantages of investing in hedge funds

Advantages of hedge funds

  • More spread of the entire investment portfolio. This form of spread can reduce the negative effect of a falling market on your entire investment portfolio.
  • The return is less dependent on market conditions through the use of absolute return strategies
  • There is an opportunity to take advantage of a rising and falling market by using long and short positions.

Disadvantages of hedge funds

  • Hedge funds can use leveraged products (options and futures) and short-selling. The risks that individual hedge funds take can therefore be greater than the risks of regular investment funds.
  • Hedge funds often have poor liquidity; they cannot always be traded on a daily basis. And the fund manager can even close the hedge fund in certain situations. In that case, you cannot sell your investment in the hedge fund. 
  • The costs of hedge funds are not always clear through the use of a performance-related fee, often with different conditions. In addition, the management costs are often higher than the management costs of regular investment funds. 
  • Hedge fund investments can be complex and non-transparent, because the portfolio is not based on a benchmark. It is difficult for you as a private investor to determine in what hedge funds invest.

What you need to know about hedge funds

Investing in hedge funds with ABN AMRO

The range of hedge funds at ABN AMRO consists of different types of hedge funds and offers single manager funds and multi manager funds, also known as funds of hedge funds. ABN AMRO preferably offers investors fund-of-funds (FOF). Such solutions give you access to a hedge fund portfolio with a good spread over various strategies, including absolute return and short-selling. ABN AMRO continuously monitors these hedge funds.

If you invest independently with ABN AMRO, you can only invest in hedge funds through Self-directed Investing Plus. You can buy and sell hedge funds using the ABN AMRO app, Internet Banking, or My Dealingroom.

Learn how to place an order with the ABN AMRO app and Internet Banking

Discover the possibilities of My Dealingroom

Before you can invest in hedge funds with ABN AMRO, we ask that you first complete a knowledge test. You can take this test via Internet Banking, and you will receive an invitation for it when you apply for Self-directed Investing Plus with us. If you pass this test, you have sufficient knowledge to invest in hedge funds. If you do not pass, investing in hedge funds may not be suitable for you. In that case, you will not be able to place orders in hedge funds.

Investing involves risks

Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.