As it is generally stipulated that short selling is not allowed in the same fund, the purpose of hedge funds is to hedge the risk of market decline by shorting. However, up to now, the operation mode of hedge funds has been quite different from its intention. On the contrary, it is aimed at pursuing the maximum return, and most of them use short selling to trade with derivative financial products to increase rather than reduce risks.

The risks of hedge funds include leverage risk, short selling risk, high-risk preference, lack of transparency, lack of regulation and risks brought by option volatility.

The early hedge fund can be said to be a form of fund management based on the conservative investment strategy of hedging and preserving value. However, after decades of evolution, hedge funds have lost their original connotation of risk hedging, and the title of Hedge Fund is also in name only.

Hedge funds have become synonymous with a new investment model, that is, based on the latest investment theory and extremely complex financial market operation skills, making full use of the leverage of various financial derivatives, taking high risks and pursuing high returns.

Hedge funds are often referred to as "long/short stock hedging", pointing out that Hedgefunds emphasize the investment strategy of short selling and short selling, and each hedge fund will adopt a unique strategy suitable for its own situation.

its investment targets include stocks, bonds and commodities, and it especially prefers to invest in high-yield derivative financial products and Distressed Debt.