Question

Discuss some of the differences between mutual funds and hedge funds

Answer 1

Basis of difference	Mutual fund	Hedge Fund
Meaning	in Mutual fund, funds are collected from small investors and then invest the pooled fund into a diversified portfolio	Hedge funds is a kind of mutual fund in which funds are collected by few wealthy investors to buy the assets
Management	Its management depends on the scheme of mutual fund	These are highly aggressive managed to maximize the return and minimize the risk
No of owners	thousand of units holders are the owners of mutual funds	Only few
Investors	small and medium call investors and retail investor	Pension fund, endowment funds and high net worth individuals
Regulation	Strict degree of supervision	less degree of supervision
Ownership of fund manager	not substantial	ownership is substantial
returns	Absolute	relative