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Hedge Fund

Glossary

A hedge fund is a privately managed investment fund that uses advanced strategies to generate returns for high-net-worth individuals and institutions. Unlike mutual funds, hedge funds have fewer regulations, allowing them to take riskier positions.

Common Hedge Fund Strategies:

  • Short Selling → Betting on stock declines.
  • Leverage → Borrowing money to increase returns (and risks).
  • Arbitrage → Exploiting small price differences between assets.

Hedge funds aim for high returns, but they come with high fees and significant risks, often making them unsuitable for average investors.