For Hedge Fund we have terms and definitions in 6 topics. The topics are Accounting, Business, Finance, Financial, Frauds and Scams and Investing.

Hedge Fund (Accounting)

is a special type of investment fund with fewer restrictions on the types of investments it can make. Of note is a hedge fund's ability to sell short. In exchange for the ability to use more aggressive strategieshedge funds are more exclusivei.e.fewer peopleusually only the wealthyare allowed to invest in hedge funds.

Hedge Fund (Business)

A mutual fund that takes considerable risks, including heavy investment in unconventional instruments, in the hope of generating great profits.

Hedge Fund (Finance)

A fund that may employ a variety of techniques to enhance returns, such as both buying and shorting stocks according to a valuation model.

Hedge Fund (Financial)

A very specialized, volatile investment company (mutual fund) that permits the manager to use a variety of investment techniques normally prohibited in other types of funds.

Hedge Fund (Frauds and Scams)

"Hedge fund" is a general, non-legal term that was originally used to describe a type of private, unregistered investment pool that employed sophisticated hedging and arbitrage techniques to trade in the corporate equity markets. Hedge funds generally rely on Sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 to avoid registration and regulation as investment companies as well as Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933 to avoid having to register with the SEC. To qualify, they represent that they only accept financially sophisticated investors and do not publicly offer their securities.
It is the fact that they are private, and exempt from registration, that makes them attractive to con artists. In many cases, the principals fraudulently represent themselves to be dealing exclusively with sophisticated investors and publicly advertise as well – even legitimate hedge funds are subject to the antifraud provisions of the federal securities laws. See the David Mobley (Maricopa) case under Case Studies for a classic example of a con artists “Hedge Fund” operation.

Hedge Fund (Investing)

Securities term that describes funds that use hedging techniques. For example, an option fund may use futures contracts on stock market indexes and short sales with stock options to limit risks.

See Also: Futures Contract; Hedging; Index; Options; Risk; Selling Short

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