what is Hedge fund?

Answer 1

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A hedge fund is a lightly regulated private investment fund. The term "Hedge Fund" is not a specific legal one but is used to differentiate lightly regulated funds which are (because of their lighter regulation) generally only open to a limited number investors each of whom must invest very large amounts on a "private placement" basis from retail investment funds, which are widely available to the general public and which tend to be referred to as Mutual Funds.

Because of the comparative absence of regulatory oversight Hedge Funds have a great deal of flexibility in terms of investment strategies they can adopt. Where Mutual Funds may be limited to being "long" the market by buying instruments such as bonds, equities or money market instruments, and may have a limited ability to enter into derivative contracts, hedge funds do not suffer such regulatory restrictions, and are limited only by the terms of the contracts governing the particular fund. Depending on their "investment guidelines" and the "style" of the fund, hedge funds may be long or short the market and may enter into futures, swaps and other derivative contracts. In this way, hedge funds are able to create more complex investment strategies which may, for example, profit in times of market volatility, or even in a falling market.

Because of usual limits on investor numbers of minimum investment amounts, Hedge funds are normally open only to professional, institutional or otherwise accredited investors

Answer 2

A hedge fund is an investment vehicle that is able to go long and short in several countries with leverage. This frees the manager to pursue the best investment opportunities available and could lead to better returns.

Answer 3

Here are some links directly from the Securities and Exchange Commission website. Some is a little technical but other parts abundantly clear. Dig as much as you want. Good luck.

Answer 4

A mutual type/Index fund with less rules governing what they can do with your money.