What Is a Hedge Fund?

What is a Hedge Fund?

A Hedge Fund is a private investment vehicle that is less regulated than traditional investment companies. The name comes from the funds' traditional role as "hedges" against downturns in more conventional investments. Hedge funds have historically taken investment positions that are relatively uncorrelated with broader financial markets or that may be in opposition to broader markets. In more recent years, the term has been expanded to cover funds that employ very complex investment strategies. Once relatively obscure and, by federal statute, reserved for very wealthy investors, hedge funds today manage nearly $1.5 trillion in assets for investors that include pension funds and university endowments.

Academics, industry professionals, and regulatory authorities overwhelmingly agree that hedge funds benefit the economy by mitigating price downturns, bearing risks that others will not, making securities more liquid, and ferreting out inefficiencies.

Those benefits are possible because hedge funds are subject to much less regulation than most investment companies. Compared to mutual funds, hedge funds are less restricted in their use of derivatives and leverage, and have greater incentives to do so because they are not required to disclose their strategies or holdings publicly.

Reason for growth in India:

There have been a lot of changes in the world economy over the last 6 decades. We have witnessed the rise and fall of nations such as Germany, Russia, Japan, Singapore and whole lot of others. This trend only proves to us that the state of