CDO securitization debt certificate is an important part of collateralized debt obligation securitization family. Its underlying assets are usually credit assets or bonds. This leads to two important branches of asset classification: CLO (mortgage bond) and CBO (mortgage bond). The former refers to the securitization of credit assets, while the latter refers to the re-securitization of market-circulating bonds. But they are all collectively referred to as CDO. Hedge fund (also known as hedge fund or arbitrage fund) means "risk hedge fund", which originated in the United States in the early 1950s. At that time, the purpose of operation was to use financial derivatives such as futures and options, as well as the operational skills of buying and selling different related stocks and hedging risks, which could avoid and resolve investment risks to a certain extent. 1949 The first Jones hedge fund with limited cooperation in the world was born. Although hedge funds appeared in the 1950s, they did not attract much attention in the next thirty years. Until 1980s, with the development of financial liberalization, hedge funds had broader investment opportunities, and then entered a stage of rapid development. In 1990s, the global inflation threat gradually decreased, financial instruments became more mature and diversified, and hedge funds entered a stage of vigorous development. According to the Economist, from 1990 to 2000, more than 3,000 new hedge funds appeared in the United States and Britain. After 2002, the yield of hedge funds has declined, but the scale of hedge funds is still not small. According to the Financial Times' report on October 22nd, 2005, the total assets of global hedge funds have reached 1. 1 trillion dollars. The characteristics of hedge funds have evolved for decades. Hedge funds have lost the original connotation of risk hedging, and the title of hedge funds also exists in name only. Hedge fund has become synonymous with a new investment model. That is, based on the latest investment theory and extremely complicated financial market operation skills, we should make full use of the leverage of various financial derivatives and take high risks. Pursuing a high-yield investment model. The current hedge funds have the following characteristics: (1) The complexity of investment activities. In recent years, increasingly complex and innovative financial derivatives such as futures, options and swaps have gradually become the main operating tools of hedge funds. These derivatives were originally designed to hedge risks, but because of their low cost, high risk and high return, they have become effective tools for many modern hedge funds to speculate. Hedge funds match these financial instruments with complex portfolios, invest according to market forecasts, and obtain excess profits under accurate forecasts, or use the imbalance caused by short-term midfield fluctuations to design investment strategies to obtain the price difference when the market returns to normal. (2) The investment effect is highly leveraged. Typical hedge funds often use bank credit to expand their investment funds with leverage several times or even dozens of times that of the original funds, so as to maximize their returns. The high liquidity of securities assets of hedge funds makes it convenient for hedge funds to use fund assets for mortgage loans. A hedge fund with a capital of only 10 billion dollars can lend billions of dollars by repeatedly mortgaging its securities assets. The existence of this hit effect makes the net profit after deducting loan interest from a transaction far greater than the possible income from capital operation with only $6,543.8 billion. Similarly, it is precisely because of the leverage effect that hedge funds often face great risks of excessive losses in the case of improper operation. (3) Private financing. The organizational structure of hedge funds is generally partnership. Fund investors buy shares with funds, provide most of the funds, but do not participate in investment activities; Fund managers join in with funds and skills, and are responsible for the investment decisions of funds. Because hedge funds require a high degree of concealment and operational flexibility, the partners of hedge funds in the United States are generally controlled below 100, and the contribution of each partner is above 100 million US dollars. Because hedge funds are mostly private, they evade the strict requirements of American law on information disclosure of public offering funds. Due to the high risk and complex investment mechanism of hedge funds, many western countries prohibit them from publicly recruiting funds to protect the interests of ordinary investors. In order to avoid the high taxes in the United States and the supervision of the US Securities and Exchange Commission, hedge funds operating in the US market generally register offshore in some areas with low taxes and loose regulations, such as the Bahamas and Bermuda, and are limited to raising funds from investors outside the United States. (4) The concealment and flexibility of operation. Hedge funds and securities investment funds for ordinary investors are not only quite different in terms of fund investors, fund raising methods, information disclosure requirements and supervision degree. There are also many differences in the fairness and flexibility of investment activities. Securities investment funds generally have a clear definition of portfolio. In other words, there is a definite plan for the choice and proportion of investment tools. For example, a balanced fund means that stocks and bonds in the fund portfolio are roughly equally divided, and growth funds means that investment is concentrated in high-growth stocks; At the same time, * * * mutual funds are not allowed to use credit funds for investment, while hedge funds are completely exempt from these restrictions and definitions. They can use all operational financial instruments and combinations to maximize the use of credit funds in order to obtain excess returns higher than the average market profit. Hedge funds play an important role in speculation in modern international financial markets because of their high concealment, operational flexibility and leveraged financing effect.