A previous article noted that hedge funds tend to be fairly secretive, and discussed some of the reasons for that. However, both investor pressure and the threat of regulation have led hedge funds to be somewhat more transparent over time, even if only selectively so.
One way for funds to be more transparent is to disclose risk factors rather than specific positions. Thus, the hedge fund could say they have exposure to equities, interest rates, volatility, or other factors without noting specific positions. Investors are able to learn important information about their investments, including what types of risk they may need to diversify or hedge, but competitors do not get information they could use to either piggy-back or front-run the hedge fund.For more information, see all articles on: Uncategorized See also: