What is a hedge fund?

A hedge fund is an investment fund that pools capital from accredited investors or institutional investors to invest in a variety of assets, including stocks, bonds, real estate, and derivatives. Hedge funds are known for using sophisticated strategies to achieve high returns, often taking on higher risk and employing leverage. Unlike mutual funds, hedge funds are less regulated and may use strategies such as short selling, options, and futures to protect against losses or maximize returns. While hedge funds can offer high rewards, they are typically more suitable for experienced investors due to their complexity and risk.