Convergence of Hedge and Mutual Funds

Reuters reports: "U.S.-based Fidelity Investments is road-testing two funds that will allow its managers to use the tools normally only available to hedge funds, the company said on Tuesday. Fidelity's move has reinforced talk that the two extreme arms of the fund-management industry -- traditional and hedge fund -- are moving closer together and blurring the line that makes them distinct, analysts said. The Fidelity Active Strategy (FAST) funds for European and Japanese equity markets launched last October allow managers to use index derivatives, borrow to make bigger investments and short sell -- bet on a lower price for a security in the future."