June 1st, 2004, 2:19 pm
IFX to sell CFDs on hedge funds posted on Tuesday 1 Jun 2004 11:02 MEST From Financial Times - see full story Financial Times reports hedge funds are about to be opened up to the UK retail market through a new product that will allow investment by people with net worth of as little as £50,000.This week IFX, a financial trading business, will sell contract-for-differences (CFDs) on a small number of hedge funds, giving retail investors access to the underlying fund through derivatives.By using a CFD, an investor can buy into the performance of the fund without having to invest directly. IFX invests in the fund, and then sells the economic performance of the fund through a CFD. This process avoids regulatory hurdles.However, IFX will not be able to provide investors with anything more than basic information on the hedge funds.The Financial Services Authority has strict rules on hedge funds being sold to investors because the products are unregulated. Hedge funds are not allowed to market themselves directly.According to Tass research, hedge funds gained a record $38.2 billion in the opening quarter of the year, the fourth consecutive quarterly record of industry inflows.