Many mutual funds and closed-end funds have tried to mimic successful hedge fund strategies. However, at the end of the day, they are still not hedge funds, according to BusinessWeek. Now, individuals who desire hedge fund-like returns and are willing to take the risk, are buying shares in companies that invest similar to hedge funds.
Under laws that mutual funds are governed by, they are not able to borrow an amount of money exceeding one-third of their assets. This limits their ability to sell short stocks that they think are going to decrease or increase on those they think are going to rally.