Nassau-based offshore investment company Magnum is hedging its bets with its new bull & bear fund.
Bull & bear is a fund of hedge funds aimed at high net worth individuals and institutional investors such as pension fund managers and banks, with the minimum investment limit being $100,000.
The fund aims to avoid any volatility in the world's stock markets by investing in an average of 15 to 20 hedge funds to provide growth. These funds will include arbitrage funds which identify markets which are going down and look to counterbalance these by investing in rising markets, funds in markets that are neither bullish nor bearish and long or short funds.
Long funds buy stocks in the hope that they will rise, so that the stocks can be sold for a profit when the price peaks. Shorts funds achieve the opposite by identifying falling stocks that can be bought cheaply when the price hits bottom.
Fund of hedge funds offer better returns than normal fund of funds, but with a slightly higher level of risk. Investors keen on getting into the Dow Jones or Nasdaq 100 indices in particular might bear this in mind due to their recent peaks and troughs.
According to Standard & Poor's the Magnum capital growth fund is ranked 2 out of 48 funds, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over three years to August 7, 2000.