Hedge fund is a type of private and unregistered investment-pool that employs sophisticated hedging and arbitrage techniques in both domestic and international markets to generate high returns.
Traditionally Hedge funds have been limited to sophisticated, wealthy investors because they required a large initial investment.
Earlier most of the hedge funds strategies such as leverage, long, short and derivative positions were focused on corporate equity markets. But now hedge funds new focus areas are commodities and money markets.
Because hedge funds are unregistered, they can use securities and strategies that are either prohibited or restricted in registered funds. That is why -hedge funds are also referred as non traditional or alternative investment. Continue reading “Primer on Hedge Funds”