Here’s 48 Hedge Fund Terms Every Investor Should Know
For many investors, hedge funds appear to be shrouded in mystery.
There’s a practical reason for this. The best hedge funds are extremely careful about protecting their ideas and tactics, because they provide an important competitive advantage for making profits. An example that illustrates the paranoia around this was described in Flash Boys by Michael Lewis, where he noted that at the ultra-secretive firm Citadel, it took five ID card swipes for an employee to simply start her day.
There’s also a psychological reason for the secrecy – which is that hedge funds want to appear incredibly complex and sophisticated, so that accredited investors will part with their money in order to get exposure to them. While hedge fund tactics are often intricate and extremely lucrative, understanding how they work is not as impenetrable as it may seem.
Hedge Fund Terms Investors Should Know
Today’s infographic comes to use from StocksToTrade, and it captures 48 terms that can serve as an entry point for any investor into the mysterious world of hedge funds.
It covers essential ideas around how hedge funds make their bets, such as: arbitrage, hedging, pairs trading, alpha, and beta. The infographic also looks at hedge fund terms around measuring performance and risk, as well as words that describe fee structures and payouts.
Interestingly enough, we live during a time when modern technology has also allowed retail investors more access to these types of tactics than ever before. Take a look at this infographic on alternative investments, which gives examples of ETFs and mutual funds that mimic traditional hedge fund strategies such as long/short equity, merger arbitrage, or managed futures.
Want to learn more about how hedge funds work?
All of the World’s Money and Markets in One Visualization (2022)
From the wealth held to billionaires to all debt in the global financial system, we look at the vast universe of money and markets in 2022.
All of the World’s Money and Markets in One Visualization
The era of easy money is now officially over.
For 15 years, policymakers have tried to stimulate the global economy through money creation, zero interest-rate policies, and more recently, aggressive COVID fiscal stimulus.
With capital at near-zero costs over this stretch, investors started to place more value on cash flows in the distant future. Assets inflated and balance sheets expanded, and money inevitably chased more speculative assets like NFTs, crypto, or unproven venture-backed startups.
But the free money party has since ended, after persistent inflation prompted the sudden reversal of many of these policies. And as Warren Buffett says, it’s only when the tide goes out do you get to see “who’s been swimming naked.”
Measuring Money and Markets in 2022
Every time we publish this visualization, our common unit of measurement is a two-dimensional box with a value of $100 billion.
Even though you need many of these to convey the assets on the balance sheet of the U.S. Federal Reserve, or the private wealth held by the world’s billionaires, it’s quite amazing to think what actually fits within this tiny building block of measurement:
Our little unit of measurement is enough to pay for the construction of the Nord Stream 2 pipeline, while also buying every team in the NHL and digging FTX out of its financial hole several times over.
Here’s an overview of all the items we have listed in this year’s visualization:
|SBF (Peak Net Worth)||$26 billion||Bloomberg||Now sits at <$1B|
|Pro Sports Teams||$340 billion||Forbes||Major pro teams in North America|
|Cryptocurrency||$760 billion||CoinMarketCap||Peaked at $2.8T in 2021|
|Ukraine GDP||$130 billion||World Bank||Comparable to GDP of Mississippi|
|Russia GDP||$1.8 trillion||World Bank||The world's 11th largest economy|
|Annual Military Spending||$2.1 trillion||SIPRI||2021 data|
|Physical currency||$8.0 trillion||BIS||2020 data|
|Gold||$11.5 trillion||World Gold Council||There are 205,238 tonnes of gold in existence|
|Billionaires||$12.7 trillion||Forbes||Sum of fortunes of all 2,668 billionaires|
|Central Bank Assets||$28.0 trillion||Trading Economics||Fed, BoJ, Bank of China, and Eurozone only|
|S&P 500||$36.0 trillion||Slickcharts||Nov 20, 2022|
|China GDP||$17.7 trillion||World Bank|
|U.S. GDP||$23.0 trillion||World Bank|
|Narrow Money Supply||$49.0 trillion||Trading Economics||Includes US, China, Euro Area, Japan only|
|Broad Money Supply||$82.7 trillion||Trading Economics||Includes US, China, Euro Area, Japan only|
|Global Equities||$95.9 trillion||WFE||Latest available 2022 data|
|Global Debt||$300.1 trillion||IIF||Q2 2022|
|Global Real Estate||$326.5 trillion||Savills||2020 data|
|Global Private Wealth||$463.6 trillion||Credit Suisse||2022 report|
|Derivatives (Market)||$12.4 trillion||BIS|
|Derivatives (Notional)||$600 trillion||BIS|
Has the Dust Settled Yet?
Through previous editions of our All the World’s Money and Markets visualization, we’ve created snapshots of the world’s assets and markets at different points in time.
For example, in our 2017 edition of this visualization, Apple’s market capitalization was only $807 billion, and all crypto assets combined for $173 billion. The global debt total was at $215 trillion.
|Asset||2017 edition||2022 edition||Change (%)|
|Apple market cap||$807 billion||$2.3 trillion||+185%|
|Crypto||$173 billion||$760 billion||+339%|
|Fed Balance Sheet||$4.5 trillion||$8.7 trillion||+93%|
|Stock Markets||$73 trillion||$95.9 trillion||+31%|
|Global Debt||$215 trillion||$300 trillion||+40%|
And in just five years, Apple nearly quadrupled in size (it peaked at $3 trillion in January 2022), and crypto also expanded into a multi-trillion dollar market until it was brought back to Earth through the 2022 crash and subsequent FTX implosion.
Meanwhile, global debt continues to accumulate—growing by $85 trillion in the five-year period.
With interest rates expected to continue to rise, companies making cost cuts, and policymakers reining in spending and borrowing, today is another unique snapshot in time.
Now that the easy money era is over, where do things go from here?
Ranked: The World’s 100 Biggest Pension Funds
The world’s 100 largest pension funds are worth over $17 trillion in total. Which ones are the biggest, and where are they located?
Ranked: The World’s 100 Biggest Pension Funds
View the high-resolution of the infographic by clicking here.
Despite economic uncertainty, pension funds saw relatively strong growth in 2021. The world’s 100 biggest pension funds are worth over $17 trillion in total, an increase of 8.5% over the previous year.
This graphic uses data from the Thinking Ahead Institute to rank the world’s biggest pension funds, and where they are located.
What is a Pension Fund?
A pension fund is a fund that is designed to provide retirement income. This ranking covers four different types:
- Sovereign funds: Funds controlled directly by the state. This ranking only includes sovereign funds that are established by national authorities.
- Public sector funds: Funds that cover public sector workers, such as government employees and teachers, in provincial or state sponsored plans.
- Private independent funds: Funds controlled by private sector organizations that are authorized to manage pension plans from different employers.
- Corporate funds: Funds that cover workers in company sponsored pension plans.
Among the largest funds, public sector funds are the most common.
The Largest Pension Funds, Ranked
Here are the top 100 pension funds, organized from largest to smallest.
|1||Government Pension Investment Fund||🇯🇵 Japan||$1.7T|
|2||Government Pension Fund||🇳🇴 Norway||$1.4T|
|3||National Pension||🇰🇷 South Korea||$798.0B|
|4||Federal Retirement Thrift||🇺🇸 U.S.||$774.2B|
|6||California Public Employees||🇺🇸 U.S.||$496.8B|
|7||Canada Pension||🇨🇦 Canada||$426.7B|
|8||National Social Security||🇨🇳 China||$406.8B|
|9||Central Provident Fund||🇸🇬 Singapore||$375.0B|
|11||California State Teachers||🇺🇸 U.S.||$313.9B|
|12||New York State Common||🇺🇸 U.S.||$267.8B|
|13||New York City Retirement||🇺🇸 U.S.||$266.7B|
|14||Local Government Officials||🇯🇵 Japan||$248.6B|
|15||Employees Provident Fund||🇲🇾 Malaysia||$242.6B|
|16||Florida State Board||🇺🇸 U.S.||$213.8B|
|17||Texas Teachers||🇺🇸 U.S.||$196.7B|
|18||Ontario Teachers||🇨🇦 Canada||$191.1B|
|19||National Wealth Fund||🇷🇺 Russia||$180.7B|
|21||Labor Pension Fund||🇹🇼 Taiwan||$168.9B|
|22||Washington State Board||🇺🇸 U.S.||$161.5B|
|23||Public Institute for Social Security||🇰🇼 Kuwait||$160.0B|
|25||Wisconsin Investment Board||🇺🇸 U.S.||$147.9B|
|26||Future Fund||🇦🇺 Australia||$147.9B|
|28||Employees' Provident||🇮🇳 India||$145.0B|
|29||New York State Teachers||🇺🇸 U.S.||$144.4B|
|30||North Carolina||🇺🇸 U.S.||$137.1B|
|32||GEPF||🇿🇦 South Africa||$129.1B|
|33||California University||🇺🇸 U.S.||$125.3B|
|34||Bayerische Versorgungskammer||🇩🇪 Germany||$122.0B|
|35||Ohio Public Employees||🇺🇸 U.S.||$121.6B|
|37||Public Service Pension Plan||🇨🇦 Canada||$117.9B|
|38||National Federation of Mutual Aid||🇯🇵 Japan||$117.1B|
|39||Metaal/tech. Bedrijven||🇳🇱 Netherlands||$115.8B|
|41||Universities Superannuation||🇬🇧 UK||$111.2B|
|42||Virginia Retirement||🇺🇸 U.S.||$110.0B|
|43||Pension Fund Association||🇯🇵 Japan||$109.8B|
|44||Raytheon Technologies||🇺🇸 U.S.||$108.9B|
|45||Michigan Retirement||🇺🇸 U.S.||$108.0B|
|46||Aware Super||🇦🇺 Australia||$107.5B|
|47||New Jersey||🇺🇸 U.S.||$104.5B|
|48||Minnesota State Board||🇺🇸 U.S.||$102.9B|
|49||PFA Pension||🇩🇰 Denmark||$102.7B|
|51||Georgia Teachers||🇺🇸 U.S.||$100.9B|
|52||Oregon Public Employees||🇺🇸 U.S.||$100.4B|
|53||Massachusetts PRIM||🇺🇸 U.S.||$98.5B|
|55||General Motors||🇺🇸 U.S.||$96.1B|
|56||Ontario Municipal Employees||🇨🇦 Canada||$95.7B|
|57||Ohio State Teachers||🇺🇸 U.S.||$95.1B|
|58||AP Fonden 7||🇸🇪 Sweden||$94.4B|
|59||Healthcare of Ontario||🇨🇦 Canada||$90.5B|
|60||General Electric||🇺🇸 U.S.||$90.5B|
|61||Employees' Pension Fund||🇮🇳 India||$89.5B|
|64||United Nations Joint Staff||🇺🇸 U.S.||$86.2B|
|65||Lockheed Martin||🇺🇸 U.S.||$85.7B|
|66||Quebec Pension||🇨🇦 Canada||$81.4B|
|67||National Public Service||🇯🇵 Japan||$79.9B|
|68||Tennessee Consolidated||🇺🇸 U.S.||$79.0B|
|69||Royal Bank of Scotland Group||🇬🇧 UK||$78.3B|
|70||Bank of America||🇺🇸 U.S.||$76.3B|
|71||BT Group||🇬🇧 UK||$74.3B|
|75||Los Angeles County Employees||🇺🇸 U.S.||$72.7B|
|76||Quebec Government & Public||🇨🇦 Canada||$72.4B|
|78||Northrop Grumman||🇺🇸 U.S.||$72.0B|
|79||Pennsylvania School Employees||🇺🇸 U.S.||$70.4B|
|80||Lloyds Banking Group||🇬🇧 UK||$69.7B|
|82||Colorado Employees||🇺🇸 U.S.||$68.6B|
|83||Maryland State Retirement||🇺🇸 U.S.||$68.5B|
|84||AMF Pension||🇸🇪 Sweden||$67.3B|
|86||Wells Fargo||🇺🇸 U.S.||$66.0B|
|89||Illinois Teachers||🇺🇸 U.S.||$64.0B|
|90||J.P. Morgan Chase||🇺🇸 U.S.||$62.8B|
|91||Electricity Supply Pension||🇬🇧 UK||$62.5B|
|93||Nevada Public Employees||🇺🇸 U.S.||$58.8B|
|94||B.C. Municipal||🇨🇦 Canada||$58.7B|
|95||AP Fonden 4||🇸🇪 Sweden||$57.7B|
|96||Missouri Schools & Education||🇺🇸 U.S.||$57.0B|
|97||AP Fonden 3||🇸🇪 Sweden||$55.9B|
|98||Social Insurance Funds||🇻🇳 Vietnam||$55.7B|
|99||Organization for Workers||🇯🇵 Japan||$55.6B|
|100||Illinois Municipal||🇺🇸 U.S.||$54.9B|
U.S. fund data are as of Sep. 30, 2021, and non-U.S. fund data are as of Dec. 31, 2021. There are some exceptions as noted in the graphic footnotes.
Japan’s Government Pension Investment Fund (GPIF) is the largest in the ranking for the 21st year in a row. For a time, the fund was the largest holder of domestic stocks in Japan, though the Bank of Japan has since taken that title. Given its enormous size, investors closely follow the GPIF’s actions. For instance, the fund made headlines for deciding to start investing in startups, because the move could entice other pensions to make similar investments.
America is home to 47 funds on the list, including the largest public sector fund: the Thrift Savings Plan (TSP), overseen by the Federal Retirement Thrift Investment Board. Because of its large financial influence, both political parties have been accused of using it as a political tool. Democrats have pushed to divest assets in fossil fuel companies, while Republicans have proposed blocking investment in Chinese-owned companies.
Russia’s National Wealth Fund comes in at number 19 on the list. The fund is designed to support the public pension system and help balance the budget as needed. With Russia’s economy facing difficulties amid the Russia-Ukraine conflict, the government has also used it as a rainy day fund. For instance, Russia has set aside $23 billion from the fund to replace foreign aircraft with domestic models, because Western sanctions have made it difficult to source replacement parts for foreign planes.
The Future of Pension Funds
The biggest pension funds can have a large influence in the market because of their size. Of course, they are also responsible for providing retirement income to millions of people. Pension funds face a variety of challenges in order to reach their goals:
- Geopolitical conflict creates volatility and uncertainty
- High inflation and low interest rates (relative to long-term averages) limit return potential
- Aging populations mean more withdrawals and less fund contributions
Some pension funds are turning to alternative assets, such as private equity, in pursuit of more diversification and higher returns. Of course, these investments can also carry more risk.
Ontario Teachers’ Pension Plan, number 18 on the list, invested $95 million in the now-bankrupt cryptocurrency exchange FTX. The plan made the investment through its venture growth platform, to “gain small-scale exposure to an emerging area in the financial technology sector.”
In this case, the investment’s failure is expected to have a minimal impact given it only made up 0.05% of the plan’s net assets. However, it does highlight the challenges pension funds face to generate sufficient returns in a variety of macroeconomic environments.
Personal Finance1 week ago
Ranked: The Best Countries to Retire In
Demographics4 weeks ago
Ranked: Gen Z’s Favorite Brands, Compared with Older Generations
Technology3 weeks ago
The Shrinking Trillion Dollar Market Cap Club
Markets2 weeks ago
Visualized: FTX’s Leaked Balance Sheet
Technology1 week ago
Visualizing the World’s Top Social Media and Messaging Apps
Politics4 weeks ago
Visualized: The Biggest Donors of the 2022 U.S. Midterm Elections
Misc3 days ago
Every Song With Over 1 Billion Spotify Streams
Misc3 weeks ago
Visualizing the Evolution of Vision and the Eye