Hedge Funds

A “hedge fund” is a private partnership
aimed at very wealthy investors. It can use
strategies to reduce risk. But it may also use
leverage, which increases the level of risk
and the potential rewards.

Hedge funds can invest in virtually anything anywhere.
They can hold stocks, bonds, and government securities
in all global markets. They may purchase currencies,
derivatives, commodities, and tangible assets. They
may leverage their portfolios by borrowing money against
their assets, or by borrowing stocks from investment
brokers and selling them (shorting). They may also
invest in closely held companies.