MFS Investment Management Chairman Robert C. Pozen doesn't think hedge funds require any additional regulation beyond the recent requirement to register their advisors with the Securities and Exchange Commission.

Despite swelling to $1 trillion in assets and more than 8,000 in number, hedge funds have become increasingly challenged to make money through arbitraging differences among related securities. In addition, the flattening of the yield curve has hampered their ability to make "carry trades." As a result, the average hedge fund is barely positive this year and trailed the S&P 500 in both 2003 and 2004.

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