What are the characteristics of hedge funds?

Hedge funds are mostly preferred  by the professional or institutional investors since they are aggressively managed and riskier than other funds. Their characteristics are;

  • having high leverage
  • easy to form
  • needing high wealth level for investors
  • having minimum transaction size requirement
  • having short-selling strategies
  • investing derivative instruments in addition to other assets
  • having low liquidity
  • having high commission rates taken from the investors