What is the difference between a mutual fund and a hedge fund
U.S. mutual funds are among the most strictly regulated financial products. They are subject to numerous requirements designed to ensure they operate in the best interests of their shareholders. Hedge funds are private investment pools subject to far less regulatory oversight. Hedge funds — unlike mutual funds — are not required to register with the SEC. They issue securities in “private offerings” not registered with the SEC under the Securities Act of 1933. Furthermore, hedge funds are not required to make periodic reports under the Securities Exchange Act of 1934. Some other differences between mutual funds and hedge funds are in the fees charged (hedge funds charge higher asset-based fees and performance fees while mutual funds charge only the asset-based fee; there are no limits on the fees that a hedge fund can charge; also, mutual fund fees must be disclosed by law in the prospectus to the fund), leveraging practices (mutual funds have limited ability to borrow and take on add
