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Trading Systems vs. Hedge Funds

Updated: Sep 1, 2021

Traditional hedge funds are not accessible to many small investors. Although hedge funds are typically glorified in the media with an air of secrecy, they are really not that appealing for the ordinary investor anyways. By contrast, trading systems can provide similar hedge fund strategies to the everyday investor while lowering the account minimums and fees, and providing full transparency into holdings and trades. While trading systems such as Algorithmic Futures are very similar to hedge funds, here are the main differences:

Hedge Funds:

  • High Minimums - Investment accounts of more than $1 million

  • Accredited Investors - Only available to individuals with $2 million of net worth

  • Lack of Transparency - No access to holdings or trades (monthly or annual reports)

  • High Fees - 2% management fee and 20% performance fee

Trading Systems:

  • Low Minimums - Investment accounts as low as $20,000

  • No Restrictions - Available to all individuals regardless of net worth

  • Full Transparency - Access to daily holdings and trades in your account

  • Low Fees - Flat monthly or annually fee

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