Want in on a Hedge Fund but you're not filthy rich?

[3/01/2007 | 0 COMMENTS HERE ]

The norm for hedge fund investing is that you have to have a minimum annual income exceeding $200,000/year and have at least $1million net worth. Not all of us can make that claim. Well, there are alternatives for regular people like you and I which actually match or beat some of the top hedge fund performance histories and don't come with the fees exceeding 20% of profits that the hedge funds bring with them. This is the first in a series of posts outlining unconventional investments. The investment du jour is Baron Partners and their performance is worth mentioning.

The fund is pretty heavily weighted in large casino/hotel companies, which has driven the strong performance of late, but there's no reason to believe this industry is at any particular risk compared to the general market at the moment. Additionally, they retain the ability to go short up to 35%. Your standard mutual fund never maintains a short position, which is what helps drive the incremental performance and ride out volatility.

Performance:

Since inception, it has more than doubled the return of the general market indices. While the Dow and the Nasdaq have risen about 50% since its inception in 2002, the fund has risen almost 150%. This spectacular performance comes with a rather low minimum investment of just $2000 and the expense ratio is 1.35%, which is in line with your typical actively managed fund (of which very few ever beat the market, but still charge you this fee).