The Hedge Fund Effect

Hedge funds serve wealthy individuals and institutions.It is believed they are responsible for about half the recent market declines.There had been 31 billion dollars in hedge fund redemptions as of last week.Typically these redemptions occur late in the day,when half of the recent market declines have occurred.There may be many more of these forced sales ahead.Indeed,up to a third of the 10,000 hedge funds may disappear altogether.Their investors want to cash out,so the fund managers must go on selling the funds' holdings,dragging the market down in the process.