The term hedge fund originated in the United States in the 1950s. It is a form of investment fund, which means "risk hedge fund". It is an investment tool, which can provide a combination of risks and returns different from traditional stock and bond investments. Types of hedge funds: The main type of hedge funds is stock index futures. Hedging of stock index futures can be divided into four types, namely, current hedging, intertemporal hedging, cross-market hedging and cross-variety hedging. Commodity futures hedging Commodity futures arbitrage mainly includes cash hedging, cross-hedging, cross-market arbitrage and cross-variety arbitrage. The characteristics of hedge funds: First, the high liquidity of hedge funds enables them to easily use their own assets for mortgage loans. For example, $6,543.8 billion can lend billions of dollars by repeatedly mortgaging its securities assets. The second feature is that the investment objectives of hedge funds are vague, and they can theoretically invest in any asset class, including but not limited to securities, futures and various financial derivatives and tools. Third, hedge funds usually charge 2% management fee and 20% handling fee for any increase in funds. Fourth, unlike other mutual funds, hedge funds are generally initiated through private placement and cannot be publicized through any media. Fifth, hedge funds are not regulated. In addition, hedge funds have no obligation to disclose their fund status to the relevant regulatory authorities and the public like traditional funds. Are hedge funds safe? Hedge funds are risky. Its risks mainly come from leverage risk, strategic risk, short selling risk, lack of transparency and lack of supervision. It is precisely because of its huge potential risks that it will be defined as a kind of private equity fund, rather than a public mutual fund.