Any unregistered investment fund, often characterised by unconventional strategies (i.e., strategies other than investing long only in bonds, equities or money markets). All hedge funds are supposed to be hedged from risk; hence the name
An investment company that uses high-risk techniques, such as borrowing money and selling short, in an effort to make extraordinary capital gains
Private investment fund organized to pursue an investment strategy involving uniquely risky investments such as short selling and naked options writing Also may refer to a private or public investment fund whose objective to invest in securities that would potentially profit from a general decline in the stock market, thus offering a "hedge" or insurance for investors who have significant exposure to declines from their investment portfolios
a flexible investment company for a small number of large investors (usually the minimum investment is $1 million); can use high-risk techniques (not allowed for mutual funds) such as short-selling and heavy leveraging
A fund, usually used by wealthy individuals and institutions, that is allowed to use aggressive strategies that are unavailable to most mutual funds
This is a private, unregulated investment fund for wealthy investors (minimum investments typically begin at US$1 million) specializing in high risk, short term speculation on bonds, currencies, stock options and derivatives
An investment pool which - in contradiction to its description (see "hedging")- often uses a wide range of derivative contracts to leverage the amount of capital available for investment into far larger positions
A very specialized, volatile investment company (mutual fund) that permits the manager to use a variety of investment techniques normally prohibited in other types of funds
A private investment partnership, owned by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including short selling, leverage, program trading, swaps, arbitrage and derivatives Since they are restricted by law to less than 100 investors, the minimum hedge-fund investment is typically $1 million BACK TO TOP
(fonds de couverture, en France: fonds d'arbitrage) A fund usually used by wealthy investors or institutions (because of legal restrictions) which uses aggressive strategies including selling short, leverage, program trading, swaps, arbitrage and derivatives to offset or reduce the risk associated with an existing investment or group of investments
A fund that may employ a variety of techniques to enhance returns, such as both buying and shorting stocks based on a valuation mode
A very specialized, volative investment company (mutual fund) that permits the manager to use a variety of investment techniques normally prohibited in other types of funds These techniques are borrowing money, selling short and utilizing options These funds offer extraordinary gains with above-average risk
fund that invests in future commodities in order to reduce risks and losses (Economics)
A mutual fund that uses futures to offset investment risk For example, a fund manager concerned about declining stock prices might hedge his or her holdings by buying a put option of some stocks Put options, call options and selling short are widely used hedging tools for stock fund managers Hedging is also used extensively in international funds that attempt to minimize currency risks The fund's prospectus discloses whether or not a fund engages in hedging
An investment fund that takes a very high degree of risk, often by gearing the fund, in the hope of achieving a very high absolute return
A type of investment vehicle where investors in the fund allow its managers to use higher risk investment techniques to leverage up return potential
A private investment pool for wealthy investors that, unlike a mutual fund, is exempt from SEC regulation
A fund that may employ a variety of techniques to enhance returns, such as both buying and shorting stocks according to a valuation model
A loose term used to denote managed money programs primarily designed for capital appreciation In its' original form, hedge funds were designed for institutions to reduce their exposure to the financial markets They have evolved now to be much more encompassing and are available to investors as well
Hedge funds borrow money to make big, speculative investments, usually in areas that banks and traditional investors shy away from