Funds that use hedging transactions are called hedge funds, also known as hedge funds or hedge funds. It refers to a financial fund whose purpose is to make profits by combining financial futures, financial options and other derivative financial instruments. Hedge funds have four different trading methods, namely: stock index futures hedging, product futures hedging, statistical hedging and option hedging.

What does hedge fund mean?

Advantages of hedge funds: 1 Hedge fund projects have a wide investment scope and flexible investment strategies, and leverage can be used to some extent.

No matter whether the sales market goes up or down, hedge funds can get absolute returns under certain risks, and the main goal is to seek absolute returns.

Hedge funds will have more perfect professional investment and research teams, and may be more capable of selecting stocks and bonds, providing better defense while obtaining stable returns.

4. Funds can diversify their investments in different financial derivatives to avoid some securities risks. Generally speaking, this is the characteristic of risk diversification of investment funds.

The correlation between hedge funds and major market indexes is relatively low. Adding hedge funds to the portfolio can reduce the overall return fluctuation of the portfolio and improve the risk-adjusted return of the portfolio.

As an institutional investor, funds can buy some securities that ordinary individual investors can't buy.