Can anyone explain what a "hedge fund" is in simple terms?

Please avoid too much financial jargon as I was an english literature major and failed my economics class, lol. I always hear the term "hedge fund" when a financial scandal is involved such as "insider trading" or "wiretapping", why? Finally, can you give an example of a "hedge fund"? THANKS!

3 Answers

  • 1 decade ago
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    A hedge fund is sort of like a mutual fund but with some important differences.

    - Hedge funds are not regulated by the SEC as mutual funds are.

    - A hedge fund can invest in virtually anything and in different ways whereas mutual funds are much more regulated in what they can or cannot invest in.

    - Only qualified investors (ie those with lots of money) can invest in hedge funds due to the higher risk and complexity involved in a hedge fund's activities.

    - The hedge fund pays a percentage of investment gains to the manager which is something a mutual fund does not do.

    Bridgewater is an example of a Hedge Fund company.

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  • 1 decade ago

    You give your money to a "manager" who invests it for you. He will invest in certain things but he will always "hedge" his bet so he can never lose more than 5% of the investment. If it goes up in value, he wasted his money by "hedging".

    Most hedge fund managers invest in things that pay a very small profit. It is small in percentages. But if you put $Billions of dollars into a small percentage, you can make a lot of money.

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  • 4 years ago

    The beauty of the Pleroma is the beauty of the divine. It is full of light and truth. The Pleroma was understood in different ways in Early Christianity, but thought to be the "fullness" of divine powers and attributes or was seen by some as the "divine" as compared to the "profane." If you look at the earth and the creatures living on it and think they are beautiful, the Pleroma is more so.

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