what is a hedge fund anyway?

It’s an investment vehicle.

Setting aside the legal part, you can think of a hedge fund as a pool of assets in various proportions, managed by people known as fund managers. A typical hedge fund in the stock market manages various securities for several companies to create an overall pool.

Because the pool is diverse, meaning no one asset dominates, the risk goes down. In other words, the risk is hedged, and therefore, the name.

 

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