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Hedge Funds: An Overview
What is a Hedge Fund?
A hedge fund is a pooled investment vehicle that manages capital from accredited or institutional investors with the aim of generating high returns. Unlike traditional mutual funds, hedge funds have more flexibility in investment strategies, including the ability to use leverage, short selling, derivatives, and alternative assets.
Hedge funds are typically less regulated than mutual funds, allowing managers to pursue aggressive or complex strategies to maximize returns. They often charge performance-based fees in addition to management fees, aligning incentives between managers and investors.
Key Features of Hedge Funds
Accredited Investors Only: Usually limited to high-net-worth individuals or institutional investors.
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