Speculative funds managing investments for private investors (in the US, such funds are unregulated if the number of investors does not exceed one hundred)
Funds that are extremely flexible in their investment options because they use financial instruments generally beyond the reach of mutual funds, which have SEC regulations and disclosure requirements that largely prevent them from using short-selling, leverage, concentrated investments and derivatives This flexibility, which includes use of hedging strategies to protect downside risk, gives hedge funds the ability to best manage investment risks
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
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
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 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
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
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
A private investment partnership limited to 99 high net-worth or institutional investors A hedge fund may take long and short positions in various types of securities and use leverage The investment managers are compensated by a percentage of the funds profits
Securities term that describes funds that use hedging techniques For example, an option fund may use futures contracts on stock market indexes and short sales with stock options to limit risks
A hedge fund is an investment fund that invests large amounts of money using methods that involve a lot of risk. An investment company that uses high-risk techniques, such as borrowing money and selling short, in an effort to make extraordinary capital gains
Investment vehicles, much like mutual funds, which are generally structured as partnerships wherein the number of investors is limited and whose general partner has made a substantial personal investment in the fund The offering memorandum of most Hedge Funds allows them to use a combination of sophisticated investment strategies such as taking both long and short positions, using leverage and derivatives, and investing in many markets The funds usually require investors to make a large fixed investment ( i e $100,000 ) and only allows withdrawals at certain times of the year Because Hedge Funds move billions of dollars in and out of markets quickly, they can have a significant impact on the day-to-day trading developments in the stock, bond, and futures markets
A mutual fund that involves speculative investing in stocks and options, while creating positions in other companies engaged in the same industry in the opposite direction as a means of reducing overall risk
A pooled investment vehicle that is privately organised and is administered by professional investment managers It is different from another pooled investment fund, the mutual fund, in that access is available only to wealthy individuals and institutional managers Moreover, hedge funds are able to sell securities short and buy securities on leverage, which is consistent with their typically short-term and high risk oriented investment strategy, based primarily on the active use of derivatives and short positions US hedge funds are exempt from Securities and Exchange Commission reporting requirements, as well as from regulatory restrictions concerning leverage or trading strategies