Hedge Funds

Type

Private investment fund

Structure

Often offshore corporation, limited partnership, or limited liability company

Management

Actively managed by an investment manager (organization or company)

Investor Type

High-net-worth individuals, institutional investors, accredited investors

Key Strategies

Hedging, speculative bets, leverage, computer trading algorithms (algos), long/short positions, multi-strategy, multi-manager

Asset Liquidity

Generally invest in relatively liquid assets

Investment Goal

Achieve superior risk-adjusted returns, generate positive returns uncorrelated with the broader market

Regulatory Status

Less regulated than mutual funds and ETFs, not subject to numerous regulations for investor protection

Registration Status

Unregistered

Unknown

A hedge fund is a private investment fund that pools money from high-net-worth individuals and/or institutional investors, often with the goal of achieving superior risk-adjusted returns. [...] As the name implies, hedge funds often hedge their investments so the overall fund can perform well whether markets go up or down — such as by investing long in some stocks and shorting others. That said, the term hedge fund nowadays applies to a broader set of private funds that use a variety of investment strategies, some riskier than others. For example, some hedge funds are less focused on hedging and more focused on making big, speculative bets. [...] A hedge fund is often considered an alternative investment because it differs from exposure to more traditional asset classes like public equities. Still, hedge funds can involve investing in public stocks, along with a variety of other assets. Here's a closer look at what hedge funds involve: Definition of a hedge fund

A hedge fund is a private, unregistered investment fund. Hedge funds pool money from investors and invest in securities or other types of assets with the goal of getting positive returns. As discussed below, hedge funds are generally limited to individuals and institutional investors who meet certain sophistication criteria. [...] Hedge funds generally pursue more flexible investments and strategies than registered investment companies, like mutual funds and ETFs, which may increase the risk of investment losses. Moreover, unlike mutual funds, ETFs, and other types of open-end funds, hedge funds are not marketed to retail investors. They are not subject to the numerous regulations that apply to mutual funds and ETFs for the protection of investors—including requiring that mutual fund shares be redeemable on a daily basis

A hedge fund is an investment vehicle that is most often structured as an offshore corporation, limited partnership, or limited liability company.( The fund is managed by an investment manager in the form of an organization or company that is legally and financially distinct from the hedge fund and its portfolio of assets.( Many investment managers utilize service providers for operational support.( Service providers include prime brokers, banks, administrators, distributors, and accounting [...] Hedge funds are considered alternative investments. Their ability to use leverage and more complex investment techniques distinguishes them from regulated investment funds available to the retail market, commonly known as mutual funds and ETFs. They are also considered distinct from private equity funds and other similar closed-end funds as hedge funds generally invest in relatively liquid assets and are usually open-ended. This means they typically allow investors to invest and withdraw [...] Fund of hedge funds (multi-manager): a hedge fund with a diversified portfolio of numerous underlying single-manager hedge funds. Multi-manager: a hedge fund wherein the investment is spread along separate sub-managers investing in their own strategy. Multi-strategy: a hedge fund using a combination of different strategies. 130-30 funds: equity funds with 130% long and 30% short positions, leaving a net long position of 100%.

What is Hedge Fund? ------------------- A Hedge Fund is an alternative investment vehicle that uses specialized hedging strategies across various asset classes to generate positive returns uncorrelated with the broader market. [...] Hedge fund is an actively managed investment vehicle that raises capital from accredited investors to allocate the funds into a wide array of alternative securities. Hedge funds rely on riskier strategies and techniques to construct a beta neutral portfolio, where returns are uncorrected with the broader market and unaffected by price fluctuations. [...] Hedge funds are a form of active management, where various investment strategies are utilized to generate positive risk-adjusted returns uncorrelated with the broader market. Formerly, most hedge funds strived to profit regardless of the market direction – i.e. in a bull market or bear market – with their priority on minimizing correlation to the public markets, rather than out-performance of the market overall.