investing

hedge fund

A private investment fund that uses advanced strategies — including leverage, derivatives, and short selling — to generate high returns.

Example

"Only accredited investors with millions to invest can access most hedge funds."

💡 Memory Tip

HEDGE — like hedging your bets. Hedge funds use complex strategies to bet both ways.

Etymology

Originally named because they 'hedged' bets by both buying and short-selling stocks to reduce risk.

Common Misspellings

hedgefundhedge fndhed fundhedge fudn

Related Terms

private equityshort sellingleverageaccredited investor

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