{"id":12247,"date":"2022-06-08T15:51:08","date_gmt":"2022-06-08T10:21:08","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=12247"},"modified":"2022-10-07T18:35:15","modified_gmt":"2022-10-07T13:05:15","slug":"all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/","title":{"rendered":"All You Need to Know about Differences between Hedge Funds, ETFs, and Mutual Funds"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d76a76de803\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d76a76de803\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#What_Are_Hedge_Funds\" title=\"What Are Hedge Funds?\">What Are Hedge Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Types_of_Hedge_Funds\" title=\"Types of Hedge Funds\">Types of Hedge Funds<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Offshore_hedge_funds\" title=\"Offshore hedge funds\">Offshore hedge funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Domestic_hedge_fund\" title=\"Domestic hedge fund\">Domestic hedge fund<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#What_Are_Mutual_Funds\" title=\"What Are Mutual Funds?\">What Are Mutual Funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Types_of_Mutual_Funds\" title=\"Types of Mutual Funds\">Types of Mutual Funds<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Equity_mutual_funds\" title=\"Equity mutual funds\">Equity mutual funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Debt_funds\" title=\"Debt funds\">Debt funds<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#What_Are_ETFs\" title=\"What Are ETFs?\">What Are ETFs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Types_of_ETFs\" title=\"Types of ETFs\">Types of ETFs<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Index_ETFs\" title=\"Index ETFs\">Index ETFs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#International_ETFs\" title=\"International ETFs\">International ETFs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Gold_ETF\" title=\"Gold ETF\">Gold ETF<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Hedge_Funds_vs_Mutual_Funds_vs_ETFs\" title=\"Hedge Funds vs Mutual Funds vs ETFs\">Hedge Funds vs Mutual Funds vs ETFs<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Final_Word\" title=\"Final Word\">Final Word<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Frequently_Asked_Questions\" title=\"Frequently Asked Questions\">Frequently Asked Questions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#What_is_an_expense_ratio\" title=\"What is an expense ratio?\">What is an expense ratio?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Do_mutual_funds_offer_any_tax_benefits\" title=\"Do mutual funds offer any tax benefits?\">Do mutual funds offer any tax benefits?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#What_is_the_minimum_investment_in_a_hedge_fund\" title=\"What is the minimum investment in a hedge fund?\">What is the minimum investment in a hedge fund?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/#Interested_in_how_we_think_about_the_markets\" title=\"Interested in how we think about the markets?\">Interested in how we think about the markets?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><span style=\"font-weight: 400;\">Mutual funds, ETFs, and <\/span>hedge funds<span style=\"font-weight: 400;\"> are some of the most popular investment options. All these involve mobilizing funds to create a large corpus that fund managers professionally manage. Investments are made in various financial securities with the primary aim of risk mitigation and generating substantial returns.\u00a0\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><i><span style=\"font-weight: 400;\">To know more about these investment options and their differences, read on!<\/span><\/i><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/kuvera.in\/explore\/fixed-deposit\/c\/all\"><img loading=\"lazy\" class=\"size-large wp-image-13417 aligncenter\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg\" sizes=\"(max-width: 640px) 100vw, 640px\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-300x98.jpg 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-768x250.jpg 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022.jpg 1080w\" alt=\"Online Fixed Deposits on Kuvera\" width=\"640\" height=\"209\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Are_Hedge_Funds\"><\/span>What Are Hedge Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Hedge funds refer to investment vehicles that allocate a substantial investment corpus to unconventional assets. These privately pooled funds invest in derivatives, venture capital, currency, real estate, etc. It is not mandatory for hedge funds to be registered with SEBI. <\/span>Hedge funds in India are governed by SEBI (AIF) Regulations, 2012.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_Hedge_Funds\"><\/span>Types of Hedge Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Here are the different types of hedge funds:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Offshore_hedge_funds\"><\/span>Offshore hedge funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">These funds are based in a different country from the origin country. Fund houses locate these offshore funds in a country with low tax rates. They mainly invest in overseas assets.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Domestic_hedge_fund\"><\/span>Domestic hedge fund<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Only residents of the country where the privately pooled investment fund is located are eligible to invest their money in this type of hedge fund. These are subject to taxation laws of the origin country.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Are_Mutual_Funds\"><\/span>What Are Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\">mutual fund<\/a> is again a privately pooled investment option. Fund managers of mutual fund schemes invest in equity, debt, and other asset classes as per the fund&#8217;s requirements. It allows investors to get exposure to shares at a lower price than direct investment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Moreover, investments through mutual funds provide investors with portfolio diversification, expert consultation\/advice, and ease of investment.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors receive units of mutual funds in return for investing their money. The Net Asset Value of funds changes each day at the end of every trading session.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_Mutual_Funds\"><\/span>Types of Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The different types of mutual funds based on the underlying asset class are given below:<\/span><b>\u00a0\u00a0\u00a0\u00a0<\/b><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Equity_mutual_funds\"><\/span>Equity mutual funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">These <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/equity\">equity funds<\/a> primarily invest in equity and equity-related instruments. There are subcategories in equity funds, such as <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/equity\/small-cap-fund\">small-cap funds<\/a>, <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/equity\/mid-cap-fund\">mid-cap funds<\/a>, large-cap, and <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/equity\/multi-cap-fund\">multi-cap funds<\/a>, which must invest in <a href=\"https:\/\/kuvera.in\/stocks\/listing\/all\">stocks<\/a> adhering to SEBI&#8217;s market capitalization and asset allocation guidelines. For example, <a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/equity\/large-cap-fund\">large-cap funds<\/a> must invest at least 80% of the fund corpus in large-cap stocks.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Debt_funds\"><\/span>Debt funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/debt\">Debt Funds<\/a> invest their money in debt instruments (fixed-income instruments). Debt instruments include <a href=\"https:\/\/kuvera.in\/blog\/what-are-corporate-bond-funds-and-how-do-they-work\/\">corporate bonds<\/a>, certificates of deposit, debentures, government securities, etc.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\"><a href=\"https:\/\/kuvera.in\/mutual-funds\/all\/hybrid\">Hybrid mutual funds<\/a> invest in multiple asset classes, including equity and debt, adhering to SEBI regulations.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Are_ETFs\"><\/span>What Are ETFs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/kuvera.in\/blog\/what-is-exchange-traded-funds\/\">Exchange-traded funds<\/a> are similar to traditional mutual funds that follow a particular index. A significant feature of an ETF is that you can trade the units of an ETF on stock exchanges just like equity shares, and their NAV or Net Asset Value changes during trading sessions.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, the SBI &#8211; ETF Nifty 50 tracks and invests in all the Nifty 50 index stocks. The weightage of stocks in the portfolio is similar to the weightage given to these stocks in the Nifty 50 index.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Types_of_ETFs\"><\/span>Types of ETFs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Here are some popular types of ETFs:<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Index_ETFs\"><\/span>Index ETFs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">These ETFs track and follow a specific index like Sensex, Nifty 50, etc. Fund managers just replicate the performance of the underlying benchmark index.<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"International_ETFs\"><\/span>International ETFs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">These ETFs invest in shares of international companies. The main aim of these ETFs is to replicate what is happening in a foreign market.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h3><span class=\"ez-toc-section\" id=\"Gold_ETF\"><\/span>Gold ETF<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As the name suggests, these <a href=\"https:\/\/kuvera.in\/blog\/what-is-gold-etf\/\">Gold ETF<\/a> funds invest in bullion markets only. Investors will not receive physical gold, but they will benefit from changes in the price of gold. It is buying and selling gold without actually having to hold the gold physically.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Hedge_Funds_vs_Mutual_Funds_vs_ETFs\"><\/span>Hedge Funds vs Mutual Funds vs ETFs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Differences between these investment options are as follows:<\/span><\/p>\n<p>&nbsp;<\/p>\n<table style=\"width: 100%;\" border=\"1.5\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><b>Parameter<\/b><\/td>\n<td style=\"text-align: center;\"><b>ETF<\/b><\/td>\n<td style=\"text-align: center;\"><b>Mutual Fund<\/b><\/td>\n<td style=\"text-align: center;\"><b>Hedge Fund<\/b><\/td>\n<\/tr>\n<tr>\n<td><b>Management<\/b><\/td>\n<td><span style=\"font-weight: 400;\">ETFs are passively managed funds where the managers replicate the performance of the underlying benchmark index<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Fund managers actively or passively managed mutual funds. They prepare strategies and use their insights to generate returns for their clients.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Hedge fund managers actively manage hedge funds. All decisions regarding the underlying asset class are taken by them.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Liquidity<\/b><\/td>\n<td><span style=\"font-weight: 400;\">ETFs have very high liquidity because units are tradable on stock exchanges.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Mutual funds are less liquid than ETFs but more liquid than hedge funds.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Hedge funds have the least liquidity among the three.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Expense ratio<\/b><\/td>\n<td><span style=\"font-weight: 400;\">These come with a meager expense ratio. However, investors have to pay brokerage charges, STT, and other fees for trading on the stock exchange.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The expense ratio of actively managed mutual funds is higher than ETFs. It includes operational and administrative costs, which are pretty high in a mutual fund.\u00a0<\/span><\/td>\n<td><span style=\"font-weight: 400;\">The expense ratio is relatively high in the case of hedge funds.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Investors<\/b><\/td>\n<td><span style=\"font-weight: 400;\">Retail and small investors primarily invest in these funds.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Both retail investors and HNIs allocate their funds to mutual funds<\/span><\/td>\n<td><span style=\"font-weight: 400;\">However, for hedge funds, the bulk investment comes from large institutions and HNIs.<\/span><\/td>\n<\/tr>\n<tr>\n<td><b>Transparency<\/b><\/td>\n<td><span style=\"font-weight: 400;\">All transactions and holding-related information are disclosed daily.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">In mutual funds, details about the schemes, for example, portfolio holdings are disclosed every month.<\/span><\/td>\n<td><span style=\"font-weight: 400;\">For hedge funds, only their investors have access to disclosures and reports.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Final_Word\"><\/span>Final Word<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p>Hedge funds, <span style=\"font-weight: 400;\">exchange-traded funds, and mutual funds are investors&#8217; most preferred investment options. They have a different target audience and are quite different in their work. You can go through this guide as this will help you make an informed decision about where you should invest your funds.<\/span><b>\u00a0<\/b><\/p>\n<p>&nbsp;<\/p>\n<p><b>Pro tip: <\/b><span style=\"font-weight: 400;\">Start investing through a platform that brings goal planning and investing to your fingertips.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"What_is_an_expense_ratio\"><\/span>What is an expense ratio?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">An expense ratio is a fee that a fund house levies on the investors to cover the cost incurred for running the fund. The various expenses include fund management fees, distribution charges, advertisement expenses, etc.<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"Do_mutual_funds_offer_any_tax_benefits\"><\/span>Do mutual funds offer any tax benefits?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">As per Section 80C of the IT Act, investments of up to Rs. 1.5 lakh in ELSS can be claimed as a tax deduction.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li aria-level=\"1\">\n<h4><span class=\"ez-toc-section\" id=\"What_is_the_minimum_investment_in_a_hedge_fund\"><\/span>What is the minimum investment in a hedge fund?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A fund is only classified as a hedge fund if the minimum corpus of the fund is Rs. 20 crores and at least Rs. Each investor invests 1 crore.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interested_in_how_we_think_about_the_markets\"><\/span>Interested in how we think about the markets?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p>Read more: <a href=\"https:\/\/kuvera.in\/blog\/category\/zen-and-the-art-of-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Zen And The Art Of Investing<\/strong><\/a><\/p>\n<p>Check out all our &#8220;Investor Education Originals&#8221; videos on Youtube and get smart about investing.<\/p>\n<p>&nbsp;<\/p>\n<p><iframe loading=\"lazy\" title=\"SIP for the right start to your dreams | Best of Investor Education\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/8uwn1YpSsFU?list=PLDSzQdT9nLmBOsyCmLDKSz_PQcWdePZgI\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit <a href=\"http:\/\/app.kuvera.in\"><strong>Kuvera.in<\/strong><\/a> to discover <a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and <strong><a href=\"https:\/\/app.kuvera.in\/explore\/fixed-deposit\/c\/all\">Fixed Deposits<\/a><\/strong> and <a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><\/p>\n<p>#MutualFundSahiHai #KuveraSabseSahiHai #PersonalFinance #InvestorEducation<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n\n<table id=\"tablepress-2103\" class=\"tablepress tablepress-id-2103\">\n<thead>\n<tr class=\"row-1 odd\">\n\t<th class=\"column-1\"><\/th><th class=\"column-2\">Top Asset Management Companies<\/th><th class=\"column-3\"><\/th>\n<\/tr>\n<\/thead>\n<tbody class=\"row-hover\">\n<tr class=\"row-2 even\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/idfc\">IDFC Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/quant\">Quant Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/canara\">Canara Robeco Mutual Fund<\/a><\/td>\n<\/tr>\n<tr class=\"row-3 odd\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/tata\">Tata Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/dsp\">DSP Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/uti\">UTI Mutual Fund<\/a><\/td>\n<\/tr>\n<tr class=\"row-4 even\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/whiteoak\">Whiteoak Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/motilal\">Motilal Oswal Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/mirae\">Mirae Asset Mutual Fund<\/a><\/td>\n<\/tr>\n<tr class=\"row-5 odd\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/icici\">ICICI Prudential Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/hdfc\">HDFC Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/absl\">Aditya Birla Sunlife Mutual Fund<\/a><\/td>\n<\/tr>\n<tr class=\"row-6 even\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/barodabnpparibas\">Baroda BNP Paribas Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/invesco\">Invesco Mutual Funds<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/jm\">JM Financial Mutual Funds<\/a><\/td>\n<\/tr>\n<tr class=\"row-7 odd\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/tata\">Tata Mutual Funds<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/nippon\">Nippon Mutual Funds<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/franklin\">Franklin Templeton Mutual Funds<\/a><\/td>\n<\/tr>\n<tr class=\"row-8 even\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/sundaram\">Sundaram Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/edelweiss\">Edelweiss Mutual Funds<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/l_t\">L&amp;T Mutual Funds<\/a><\/td>\n<\/tr>\n<tr class=\"row-9 odd\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/axis\">Axis Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/kotak\">Kotak Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/lic\">LIC Mutual Fund<\/a><\/td>\n<\/tr>\n<tr class=\"row-10 even\">\n\t<td class=\"column-1\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/dsp\">DSP Mutual Fund<\/a><\/td><td class=\"column-2\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/iifl\">IIFL Mutual Fund<\/a><\/td><td class=\"column-3\"><a href=\"https:\/\/kuvera.in\/explore\/funds\/parag\">Parag Parikh Mutual Funds<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<!-- #tablepress-2103 from cache -->\n","protected":false},"excerpt":{"rendered":"<p>Mutual funds, ETFs, and hedge funds are some of the most popular investment options. All these involve mobilizing funds to create a large corpus that fund managers professionally manage. Investments are made in various financial securities with the primary aim of risk mitigation and generating substantial returns.\u00a0\u00a0 &nbsp; To know more about these investment options [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/all-you-need-to-know-about-differences-between-hedge-funds-etfs-and-mutual-funds\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":11,"featured_media":12268,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[99,822],"tags":[727,936,935,329,67],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Difference Between Hedge Funds, ETFs and Mutual Funds- Kuvera<\/title>\n<meta name=\"description\" content=\"Read here to know the key differences betweem Mutual funds, ETFs, and hedge funds those are some of the 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