Hedge funds eye mutual funds and vice versa

May 13, 2009 | By Jim Kim

Despite a lot of negative publicity, it looks like traditional fund companies are still sold on the marketing benefits of hedge fund-like products. Fidelity just announced its IQ ALPHA Hedge Strategy Fund, as the "first no-load, open-end mutual fund to bring hedge fund-style investing to retail investors. It seeks to deliver hedge fund-like performance with lower costs, higher transparency and increased liquidity for shareholders."

Aberdeen is said to be shopping for funds of hedge funds. But AllAboutAlpha.com notes that hedge funds are also bent on invading the retail market for traditional funds. We will see more follow the lead of Permal, which launched its first mutual fund under the banner of "Tactical Allocation." There is definitely a market out there, as more individuals, high net worth or not, really want the added oomph of a hedge fund.

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