Subject. This article examines the activities of hedge funds, analyzes their strategies, and the use of derivative financial instruments for hedging risks and maximizing profits. Objectives. The article aims to analyze and structure data on hedge funds from open sources and scientific research, assess the impact of hedge funds on the stock market, and evaluate the development prospects of the Russian hedge fund market. Methods. For the study, I used the method of analysis. Results. Based on the analysis of scientific articles and research regarding hedge fund activities and the assessment of their strategies, the article finds that the use of derivative financial instruments in hedge fund strategies is effective. The article also describes the prospects of the Russian market for interval mutual investment funds. Conclusions and Relevance. Hedge funds use a wide range of strategies and financial instruments and often deliver better results compared to the market. However, not all funds are aimed at hedging risk, so the investor must choose the fund carefully. The results obtained can be used by private and corporate investors to familiarize themselves with the complex structure of hedge funds, as well as in public administration, since regulation of the hedge fund market is necessary.
Evlakhova Yu.S. [The concept of the financial market from the standpoint of modern finance theory]. Finansovyi zhurnal, 2011, no. 3, pp. 81–92. (In Russ.) URL: Link
Longo J.M. Hedge Funds: Overview, Strategies, and Trends. In: Lee C.-F., Lee A.C. (eds) Encyclopedia of Finance, Springer, 2022, pp. 1249–1271.
Stulz R.M. Hedge funds: Past, present, and future. Journal of Economic Perspectives, 2007, vol. 21, no. 2, pp. 175–194.
Asness C.S., Krail R.J., Liew J.M. Do hedge funds hedge? The Journal of Portfolio Management, 2001, vol. 28. DOI: 10.2139/ssrn.252810
Mallaby S. More money than God: Hedge funds and the making of the new elite. Penguin Books, 2011, 512 p.
Nabilou H. The conundrum of hedge fund definition. European Company and Financial Law Review, 2017, vol. 14, no. 1, pp. 149–186. URL: Link
Chikirov Yu.S. [Classification of derivative financial instruments in management accounting]. Bukhgalterskii uchet, 2009, no. 4, pp. 77–79. (In Russ.) EDN: TKOEBB
Fel'dman A. [The current economic crisis and derivative financial instruments]. Voprosy ekonomiki, 2009, no. 5, pp. 59–68. (In Russ.) DOI: 10.32609/0042-8736-2009-5-59-68 EDN: KARDNB
Carbonneau A. Deep hedging of long-term financial derivatives. Insurance: Mathematics and Economics, 2021, vol. 99, pp. 327–340. DOI: 10.1016/j.insmatheco.2021.03.017 EDN: AGQKSK
Bartram S.M. Corporate hedging and speculation with derivatives. Journal of Corporate Finance, 2019, vol. 57, pp. 9–34.
Bartram S.M., Brown G.W., Fehle F.R. International evidence on financial derivatives usage. Financial Management, 2009, vol. 38, iss. 1, pp. 185–206. DOI: 10.1111/j.1755-053X.2009.01033.x
Prevost A.K., Rose L.C., Miller G. Derivatives usage and financial risk management in large and small economies: A comparative analysis. Journal of Business Finance & Accounting, 2000, vol. 27, iss. 5‐6, pp. 733–759. DOI: 10.1111/1468-5957.00332
Buehler H., Gonon L., Teichmann J., Wood B. Deep hedging. Quantitative Finance, 2019, vol. 19, no. 8, pp. 1271–1291.
Luiz Rossi J. Jr. Hedging, selective hedging, or speculation? Evidence of the use of derivatives by Brazilian firms during the financial crisis. Journal of Multinational Financial Management, 2013, vol. 23, iss. 5, pp. 415–433.
Fung W., Hsieh D.A. The risk in hedge fund strategies: Theory and evidence from long/short equity hedge funds. Journal of Empirical Finance, 2011, vol. 18, iss. 4, pp. 547–569.
Ibbotson R.G., Chen P., Zhu K.X. The ABCs of hedge funds: Alphas, betas, and costs. Financial Analysts Journal, 2011, vol. 67, iss. 1, pp. 15–25.
Patton A.J., Ramadorai T. On the high‐frequency dynamics of hedge fund risk exposures. The Journal of Finance, 2013, vol. 68, no. 2, pp. 597–635.
Li H., Xu Y., Zhang X. Hedge fund performance evaluation under the stochastic discount factor framework. Journal of Financial and Quantitative Analysis, 2016, vol. 51, no. 1, pp. 231–257.
Newton D., Platanakis E., Stafylas D. et al. Hedge fund strategies, performance & diversification: A portfolio theory & stochastic discount factor approach. The British Accounting Review, 2021, vol. 53, iss. 5, 101000. DOI: 10.1016/j.bar.2021.101000 EDN: WCPLRX
Aragon G.O., Martin J.S. A unique view of hedge fund derivatives usage: Safeguard or speculation? Journal of Financial Economics, 2012, vol. 105, iss. 2, pp. 436–456.
Liang B. On the performance of hedge funds. Financial Analysts Journal, 1999, vol. 55, iss. 4, pp. 72–85. DOI: 10.2469/faj.v55.n4.2287
Noori M., Hitaj A. Dissecting hedge funds' strategies. International Review of Financial Analysis, 2023, vol. 85, 102453. DOI: 10.1016/j.irfa.2022.102453 EDN: IMZKLQ
