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Hedge funds have several key characteristics. A hedge fund is an aggressively managed portfolio of investments that uses leveraged long short and derivative positions.

What Is A Mutual Fund Mutuals Funds Finance Investing

Rather it is a pooled investment structure set up by a money manager or registered investment advisor.

Whats a hedge fund. In many cases hedge funds are managed to generate a consistent level of return regardless of what the market does. Key hedge fund characteristics. This pooled investment structure is often organized as either a limited partnership or a limited liability company.

A hedge fund isn t a specific type of investment. A hedge fund is a pool of money contributed by investors and run by a fund manager whose goal is to maximize returns and eliminate risk. One common theme among nearly all mutual funds is their market direction.

A hedge fund uses a range of investment techniques and invests in a wide array of assets to generate a higher return for a given level of risk than what s expected of normal investments. The use of hedge funds in personal financial portfolios has grown. What are hedge funds.

An investing group usually in the form of a limited partnership that employs speculative techniques in the hope of obtaining large capital gains. Definition of hedge fund. A hedge fund is an investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading portfolio construction and risk management techniques to improve performance such as short selling leverage and derivatives.

Aim of hedge funds.