Friday, September 21, 2018

What is a 'Hedge Fund'?

A hedge fund is an aggressively managed portfolio of investments that uses leveraged, long, short and derivative positions.
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Hedge Fund
Hedge funds are alternative investments using pooled funds that employ numerous different strategies to earn active return, or alpha, for their investors. Hedge funds may be aggressively managed or make use of derivatives and leverage in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark). It is important to note that hedge funds are generally only accessible to accredited investors as they require less SEC regulations than other funds. One aspect that has set the hedge fund industry apart is the fact that hedge funds face less regulation than mutual funds and other investment vehicles.
Breaking it Down:
Each hedge fund is constructed to take advantage of certain identifiable market opportunities. Hedge funds use different investment strategies and thus are... Read More
Related to "Hedge Fund"
What Are Hedge Funds?
Hedge funds may be similar to mutual funds in some ways, but they differ in many others. Learn their distinctions and characteristics here. Read More
How to Invest Like a Hedge Fund
Hedge funds earn big returns for investors. Find out how they do it and whether you can, too. Read More
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Discover what a hedge fund analyst does by learning about the major day-to-day responsibilities are that are required for the investment analysis job. Read More
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Related Definitions
Carried Interest
Carried interest is a share of any profits that the general partners of private equity and hedge funds receive as compensation. Read More
Two And Twenty
A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. Read More
Blow Up
A slang term used to describe the complete and abject failure of an individual, corporation, bank, development project, hedge fund, etc. Read More
Accredited Investor
Accredited investor has the financial sophistication and capacity to suffer losses that enable him to avoid certain protections of the SEC. Read More
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