Basis

Hedge Funds

Mutual Funds

A hedge fund is a portfolio of investments in which a small group of eligible rich investors pool their money to purchase assets. Mutual funds are trusts in which the resources of multiple investors are pooled together to purchase a diversified basket of securities at a reasonable cost.

Return Return is absolute. Return is relative.

Management has managed aggressively. Comparatively managed less aggressively.

OwnersIt has few owners. It has thousands of owners.

Investor typePension funds, endowment funds, and high-net-worth individuals are basic investors of hedge funds.Retail investors are the investors of mutual funds.

RegulationThere are fewer regulations. It is strictly regulated by SEBI.

FeesThe fund manager charges a fee that is based on the profit earned by funds.It is totally based on the percentage of assets managed.

TransparencyInformation is provided to investors only.Annual reports are published and semi-annual disclosure of the performance of assets.