Hedge Fund: Hedge funds are private investment partnerships open to institutions and wealthy individual investors. These funds pursue returns through a number of alternative investment strategies. Those might include holding both long and short positions, investing in derivatives, using arbitrage, and speculating on mergers and acquisitions. Some hedge funds use leverage, which means investing borrowed money to boost returns. Because of the substantial risks associated with hedge funds, securities laws limit participation to accredited investors whose assets meet or exceed Securities and Exchange Commission (SEC) guidelines.

 

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Hedge Fund: Hedge funds are private investment partnerships open to institutions and wealthy individual investors. These funds pursue returns through a number of alternative investment strategies. Those . . . View Full Definition

Fund Switching: A mutual fund or hedge fund that invests in other funds.

Fund Of Funds (FOF): A fund of funds is a pooled investment, such as a mutual fund or a hedge fund, whose underlying investments are other funds rather than individual securities. Despite some major differences, . . . View Full Definition

Perfect Hedge: A situation in which the profit and loss from the underlying asset and the hedge position are equal.