Hedge fund (hedge fund)

Hedge funds are often called "long/short stock hedging", pointing out that hedge funds emphasize short selling and short selling investment strategies, and each hedge fund will adopt a unique strategy suitable for its own situation. Its investment targets include stocks, bonds and commodities, especially high-yield derivative financial products and differentiated debts.

Because the same fund generally stipulates that short selling is not allowed, the purpose of hedge funds is to hedge the risk of market decline by shorting. However, today, the operation mode of hedge funds is quite different from its original intention. On the contrary, it is aimed at maximizing income, and most of them use short selling to trade with derivative financial products to increase rather than reduce risks.

Hedge funds are mostly open-end funds and private equity funds are mostly closed-end funds, but hedge funds often raise funds by private placement.

Compared with private equity funds, hedge funds are less liquid and often require investors not to redeem them at will within a certain period of time. Hedge funds can reach billions of dollars, and leveraged funds have higher total assets. The scale of private equity funds varies greatly and there is no leverage.