a mutual fund or partnership of investors who pool large sums of money to speculate in securities, increasing the risk of such activity by using borrowed money to leverage the investments, or by selling short.
A fund, usually used by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Since they are restricted by law to less than 100 investors, the minimum investment is typically $1 million. The general partner usually receives performance-based compensation.
Hedge funds use a range of generally high risk investment strategies including arbitrage and short selling , they are frequently highly geared.... more on: Hedge fund
An investment partnership that aggressively buys securities of certain companies while selling short at the same time shares of other companies engaged in the same industry.
A private investment partnership limited to 99 high net-worth or institutional investors, taking long and short positions and using leverage.
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.
An unregulated private investment pool that holds financial assets. To remain unregulated, hedge funds must limit their membership to small numbers of wealthy individuals and institutions. Institutional members of some hedge funds have included commercial banks. Unlike pension and mutual funds, hedge funds finance some investment from borrowing, a practice that increases the risk of their financial positions. Hedge funds may also follow complex investment strategies, especially by trading in financial derivatives--assets whose value derives from the performance of an index of more elementary assets, such as stocks or bonds of individual companies or organizations.
is a special type of investment fund with fewer restrictions on the types of investments it can make. Of note is a hedge fund's ability to sell short. In exchange for the ability to use more aggressive strategies, hedge funds are more exclusive, i.e., fewer people, usually only the wealthy, are allowed to invest in hedge funds.
A private fund which usually solicits investments from wealthy individuals. It is unregulated as it's assumed that the investors are knowledgeable and realize the speculative nature of the fund. It usually invests in high risk, short term instruments in order to achieve above-average returns.
A private investment partnership for U.S. investors, or an off-shore investment company for non-U.S. or tax-exempt investors, in which the general partner has made substantial personal investment and whose offering memorandum allows for the fund to use leverage and derivatives, take both long and short positions and invest in many markets. Hedge funds can profit in any market environment, even one with sharply declining prices, because they can take advantage of many speculative strategies, including program trading, swaps, arbitrage and selling short. Not all strategies may be used, but all must be available for use. Hedge funds can have a significant effect on day-to-day trading developments because they move billions of dollars in and out of markets quickly.
A type of investment portfolio under which the fund manager is authorised to utilise a number of higher risk investment techniques, including using derivatives, short selling and borrowing funds to generate a higher return. Hedge funds have become particularly common in the United States but are not prominent in the Australian investment scene at present.
Hedge funds are designed for wealthy individuals and institutional investors, and are not regulated as other forms of investment funds are (e.g., mutual funds). Hedge funds are allowed to employ riskier investment strategies that other investment funds are not allowed to use, including using derivatives (such as stock options), selling short, borrowing money to leverage returns and trading in currency. As a result of these strategies, hedge funds often have higher returns than mutual funds and other investment funds, and can earn positive returns in down markets. On the other hand, hedge funds can also face enormous losses.
Mutual fund or investment company which, as a regular policy, "hedges" its market commitments. It does this by holding securities it believes are likely to increase in value and at the same time shorts securities it believes are likely to decrease in value. This is an aggressive approach to capital appreciation.
(1) a limited partnership of investors that invests in speculative stocks. (2) funds using calls, puts, margin, etc., to increase return.
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.
A very specialized, volatile, open-end investment company that permits the manager to use a variety of investment techniques usually prohibited in other types of funds. These techniques include borrowing money, selling short, and using options. Hedge funds offer investors the possibility of extraordinary gains with above-average risk.
A type of investment scheme in which the fund manager can use a number of specialist investment techniques, including the use of derivatives. Short selling and borrowing to generate a higher return or make gains despite a falling stock market.
Fund that uses derivative instruments to cover risks or improve the return of the investment.
These are a subset of the alternative investment asset class. It can incorporate a wide range of investment strategies and instruments.
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
a collective investment vehicle that is privately organised by professional investment managers and is not widely available to the public
a fund that aims (in general) to offer absolute returns and to remove systemic risk that applies to normal long only equity funds
a fund that can take both long and short
a fund that can take both long and shor www
a fund that is available for several very sophisticated and rich investors to prevent policy restriction, and employ a lot investment and bargaining tools to earn more rewards
a generally unregulated investment fund usually used by wealthy investors
a generic name for a variety of relatively unregulated investment structures, which seek to provide high returns to institutions and very rich private investors
a group of investors that take very high level of risk and often invest billions of dollars
a lightly or unregulated investment fund used by high-net-worth individuals and
a loan where payment is received in kind (sometimes these funds are referred to as piks)
an absolute return oriented fund which has its own portfolio of investments
an actively managed investment fund that seeks attractive absolute return
an actively managed, non-traditional investment vehicle which trades in stocks, bonds, futures and foreign exchange instruments
an actively managed portfolio which looks for anomalies
an aggressively managed portfolio, which may take positions on speculative opportunities such as options and short selling which entail risk
an alternative investment and the two names are often used interchangeably
an investment fund, a compan
an investment fund that has a very flexible investment style
an investment fund which may use a variety of techniques to enhance returns
a private pool of capital for accredited investors only and is organized using the limited partnership legal structure
a private pool of funds from wealthy investors
a product structure, rather than an investment strategy and the structure is more naturally aligned to the investment aims of private investors
a sort of meta-fund that invests in other mutual funds
a term commonly used to describe any fund that isn't a conventional investment fund - that is, any fund using a strategy or set of strategies other than investing long in bonds, equities (mutual funds), and money markets (money market funds)
as absolute return oriented investment fund that seeks to produce investment returns from a particular investment strategy and where the manager is partly or mostly remunerated in the form of a performance fee
A managed investment where the fund manager is authorised to use derivatives and borrowing with the aim of providing a higher return.
A mutual fund involving speculative investing in stocks and options.
An investment fund aiming to generating superior returns through the use of sophisticated instruments and techniques such as currency, options, futures, leverage and short selling.
An investment fund that employs strategies to generate returns by selling or reducing exposure to overvalued securities.
(go to top) Investment partnerships that have an absolute return performance objective that is not index or benchmark based. Hedge fund strategies generally allow a manager to be active on both the long and short sides of the markets and compensate the manager with performance related fees.
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.
An aggressively managed investment with the primary goal(s) of managing risk and/or achieving a maximum rate of return for investors. Hedge funds are not always in a true sense "hedgers;" they use strategies including options, futures, swaps and arbitrage in a variety of emerging and established exchange-traded and over-the-counter markets.
One of many different types of alternative investment funds, most of which pursue a total return strategy and usually charge a performance fee in addition to annual management charges and initial fees. While some funds may pursue conservative or market-neutral strategies, many others take highly leveraged bets on directions of currency or stock movements, making them more speculative and risky undertakings.
A fund that offers an investor balance, or a "hedge", against the risks of other investments.
a broad category of portfolio, or fund, that seeks to reduce risk by transferring some of that risk to another investor. These types of assets will generally have a low correlation with equity or bond markets.
Originally, an investment fund that had the ability to go 'short' as well as to be 'long' securities. The term is now general to the point of meaninglessness, extending to virtually any aggressive investment strategy. Usually organized as limited liability partnerships.
A managed fund that attempts to make money out of small inefficiencies in the financial markets such as the difference between the price of a share in London and New York.
Also known as Absolute Return Funds. Broadly defined, a hedge fund is used as an alternative asset class, which is allowed to use sophisticated strategies, including short selling, leverage, arbitrage, and derivatives. The use of certain strategies helps a hedge fund reduce risk while enhancing absolute returns. A hedge fund manager usually receives a performance-based compensation.
A hedge fund is a fund that seeks absolute returns by taking both long and short positions, use arbitrage, buy and sell undervalued securities, trade options or bonds, and invest in almost any opportunity in any market where it foresees impressive gains at reduced risk. Hedge fund strategies vary enormously and many seek to hedge against downturns in the markets. Hedge funds and are exempt from many of the rules and regulations governing other mutual funds, which allows them more flexibility to accomplish investing goals. They are restricted by law to no more than 100 investors per fund, and as a result, most hedge funds set minimum investment amounts, ranging anywhere from $250,000 to $5 million.
A specialist leveraged investment fund that engages in trading and hedging strategies, frequently using leverage.
This term covers a wide variety of different strategies, usually designed to reduce or eliminate the impact of general stockmarket movements on returns. Often structured as offshore funds with very high minimum investment levels.
Hedge Funds pool the capital of a small number of high net worth individuals or institutions under the direction of a single manager or small team. They're usually based in offshore tax havens to escape regulators and reporting requirements. One of the reasons to domicile offshore is to be free to use trading strategies which traditional, domestically regulated retail fund are not allowed to do. A key technique is to use short as well as long positions. This can provide protection against a falling market, hence the description 'hedge' fund.
a private pool of assets, which is often managed aggressively. Hedge funds have long been active in speculative trading on crude oil markets.
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.
An investment fund that engages in trading, investing and/or hedging strategies which generally involve derivatives, leverage and/or short selling.
A fund that may employ a variety of techniques to enhance returns.
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.
A managed fund, designed to take speculative positions in currencies, etc especially on a large enough scale to force exchange rates in a desired direction. Because leverage is involved there is the scope to make substantial profits or losses in relation to the equity held.
A private investment partnership (for U.S. investors) or an off-shore investment corporation (for non-U.S. or tax-exempt investors) in which the general partner has made a substantial personal investment, and whose offering memorandum allows for the fund to take both long and short positions, use leverage and derivatives, and invest in many markets.
The collective investment fund that takes large and often leveraged risk, with the aim of earning high return.
A fund targeted to sophisticated investors that may use a wide range of strategies to earn returns, such as taking long and short positions based on statistical models.
A higher risk investment portfolio, using mechanisms such as derivatives, short selling and borrowing funds to generate a higher return.
A privately owned investment fund, whose managers usually get a percent of any gains. To achieve above market returns, they use sophisticated high risk derivatives. The primary investors are wealthy individuals and institutions.
fund, usually used by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Hedge funds are exempt from many of the rules and regulations governing other mutual funds, which allows them to accomplish aggressive investing goals. They are restricted by law to no more than 100 investors per fund, and as a result most hedge funds set extremely high minimum investment amounts, ranging anywhere from $250,000 to over $1 million. As with traditional mutual funds, investors in hedge funds pay a management fee; however, hedge funds also collect a percentage of the profits (usually 20%).
A strategy to reduce or offset investment risk using derivatives.
A private investment fund that uses high risk techniques such as short selling and derivatives to achieve a higher return. Maligned in some quarters because of the perception that some hedge funds have so much leverage their activitives can be detrimental to the global financial system.
A private investment pool for wealthy investors that, unlike a mutual fund, is exempt from SEC regulation.
A private investment vehicle whose manager receives a significant portion of its compensation from incentive fees tied to the fund's performance -- typically 20% of annual gains over a certain hurdle rate, along with a management fee equal to 1% of assets. The funds, often organized as limited partnerships, typically invest on behalf of high-net-worth individuals and institutions. Their primary objective is often to preserve investors' capital by taking positions whose returns are not closely correlated to those of the broader financial markets. Such vehicles may employ leverage, short sales, a variety of derivatives and other hedging techniques to reduce risk and increase returns. The classic hedge-fund concept, a long/short investment strategy sometimes referred to as the Jones Model, was developed by Alfred Winslow Jones in 1949.
An aggressively managed fund that takes positions usually in speculative investments. Focuses on secondary opportunities and hybrids in the loan market.
A type of investment portfolio aimed at generating higher returns through the use of several high risk investment techniques, including borrowing and short selling.
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. See: Futures Contract; Hedging; ; Options; Risk; Selling Short
Term that describes certain mutual funds that use hedging strategies.
Fund that has relatively unregulated investment partnership. With limited restrictions, fund managers can seek high rates of return by increasing financial leverage, taking both long and short positions, and trading complex derivatives. Typically, management has an incentive-based contract where fees vary directly with fund profitability.
A limited partnership with few investment restrictions. Usually based offshore (eg Cayman Islands) but shares in the fund are often quoted in Luxembourg or Dublin. Hedge funds can use a number of strategies including sell short ie sell stock they do not own to profit from price falls. Some hedge funds gear up to increase leverage (may result in large losses eg LTCM).
A fund generally available only to institutions and wealthy investors that uses aggressive strategies, such as including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Hedge funds are exempt from many of the rules and regulations governing other mutual funds.
An aggressively managed fund portfolio taking positions in both safe and speculative opportunities.
A largely unregulated investment fund that specializes in taking leveraged speculative positions.
An investment that may employ a variety of techniques to enhance returns, such as both buying and shorting stocks according to a valuation model.
A private investment fund or pool that trades and invests in various assets such as securities, commodities, currency, and derivatives on behalf of its clients, typically wealthy individuals. Some Commodity Pool Operators operate hedge funds.
A hedge fund is a private investment fund charging a performance fee and typically open to only a limited number of investors, e.g., in the U.S., hedge funds are largely open to accredited investors only. Hedge Funds have grown in size and influence on the public securities and private investment markets.