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A hedge fund is a private investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment manager. Each fund will have its own strategy which determines the type of investments and the methods of investment it undertakes, and hedge funds as a class invest in a broad range of investments extending over shares, debt, commodities and beyond.

As the name implies, hedge funds often seek to offset potential losses in the principal markets they invest in by hedging their investments using a variety of methods, most notably short selling. However, the term "hedge fund" has come to be applied to many funds that do not actually hedge their investments, and in particular to funds using short selling and other "hedging" methods to increase rather than reduce risk, with the expectation of increasing return.

Hedge funds are typically open only to a limited range of professional or wealthy investors. This provides them with an exemption in many jurisdictions from regulations governing short selling, derivative contracts, leverage, fee structures and the liquidity of interests in the fund. A hedge fund will typically commit itself to a particular investment strategy, investment types and leverage levels via statements in its offering documentation, thereby giving investors some indication of the nature of the fund.

Hedge Fund Subcategories Mutual Funds > > Hedge Fund Articles FX Online a quick history lesson by John Farrell Dec 03, 2007 Online FX a quick history lesson Electronic Foreign Exchange trading has been with us for over 15 years. Telex machines were one of the first electronic communication tools used between banks, then Reuters Direct Dealing allowed dealer to d... Welcome to the BIG Buy Low by Steve Selengut Aug 17, 2007 Every correction is the same, a normal downturn in one of the Markets where we invest. There has never been a correction that has not proven to be an investment opportunity. You can be confident that the Federal Reserve, as hypnotized as it is with k... Equity Market Neutral by Carlo Scevola Apr 18, 2007 State-of-the art Arbitrage Strategy for every market environment The classification of different hedge funds is not entirely straightforward since some funds may use a combination of... Understanding and Managing Market Turbulence. by Carlo Scevola Apr 18, 2007 At the end of February – beginning of March 2007 world financial markets have been highly volatile. But what was causing this volatility, and what does it mean for investors? The initial trigger for the huge market turbulence was the p... Introduction to Hedge Fund by Carlo Scevola Apr 10, 2007 Introduction to Hedge Fund Although there is no universally accepted definition of the term hedge fund, the term has evolved over time to include a ... What Is A Hedge Fund by Jay Northco Nov 23, 2006 What is a hedge fund? You’ll often see the title ‘hedge fund manager’ in the bios of some of Wall Street’s famous investment gurus. But what exactly is a hedge fund? How is different than any other fund? And how do you get in on the action? ... Are Hedge Funds Heading Into the Perfect Storm? by Peter Amaral Jul 02, 2006 You are going to be seeing and reading a lot more about hedge funds in the coming weeks and months. Two loosely related disturbed fronts are moving towards each other that may yet converge into the perfect storm. The S&P 500 Index, the proxy ... Hedge funds - establishing a new frontier by Tony Reed Apr 30, 2006 It is difficult to provide a general definition of a hedge fund. Initially, hedge funds would sell short the stock market, thus providing a "hedge" against any stock market declines. Today the term is applied more broadly to any type of ...