The Australian dollar has been accused of inflicting all sorts of economic ills as it traded above US$1 for most of the past three years.

Compounding isn’t a new concept – many of us will remember studying it back in our school days. Legendary scientist Albert Einstein famously called it ‘the most powerful force in the universe’. 

The hedge fund industry is currently worth around $208 billion in Australia alone. But while investors are familiar with the concept of traditional managed funds, there is less awareness of how hedge funds operate, which is the root of many misconceptions.