noun

hedge fund

HEJ fund

Hedge fund (noun) means a pooled investment fund, usually open only to institutions and wealthy individuals, whose managers may use a very wide range of strategies — including borrowing, derivatives and betting on prices falling — and which typically faces lighter regulation and fewer disclosure requirements than funds sold to the general public. Example: “He left the bank in 2019 to run a small hedge fund out of Mayfair.”

noun

finance A pooled investment fund, usually open only to institutions and wealthy individuals, whose managers may use a very wide range of strategies — including borrowing, derivatives and betting on prices falling — and which typically faces lighter regulation and fewer disclosure requirements than funds sold to the general public.

"He left the bank in 2019 to run a small hedge fund out of Mayfair."

"The pension scheme has about 4% of its money with hedge funds."

How to Use Hedge fund

Learner’s notes

In plain EnglishA private investment fund for big investors that can invest in almost anything, in almost any way.

When to use it

Neutral in financial writing; in general journalism it often carries a connotation of secrecy or aggressive dealing.

Memory tip

Two words in British and American English; the compound adjective is hyphenated, as in hedge-fund billionaire.

Trace the full origin ↓

Easily confused with

private equity fund mutual fund → venture capital fund family office

Common pairings

hedge fund manager launch a hedge fund hedge fund industry activist hedge fund

Study it as flashcards or scroll it in Flow — saved to your collection.

Test yourself on “hedge fund” A quick quiz — meaning, synonyms & usage →

Fill the Gap

Can you complete this real example?

He left the bank in 2019 to run a small _____ out of Mayfair.

Etymology

From hedge in the financial sense of taking an offsetting position to limit losses, plus fund.

Origin: English

Synonyms

View more →

alternative investment fund private fund absolute return fund

Antonyms

index fund mutual fund

Related Words

index fund mutual fund

Rhymes for hedge fund

refund

See all rhymes for hedge fund →

Frequently Asked Questions

What is the difference between a hedge fund and a mutual fund?

A mutual fund is sold to the general public, publishes its holdings and its price regularly, and is limited in how far it may borrow or bet against the market. A hedge fund is normally restricted to professional and wealthy investors, discloses far less, and has much wider freedom in what it may do with the money. Hedge funds also commonly charge a share of profits on top of a management fee, which mutual funds do not.

Why is it called a hedge fund if it does not always hedge?

The name comes from an early structure that offset holdings against one another to reduce exposure to the market as a whole — a hedge. The label stuck and is now applied to the whole category, including funds whose strategies involve no hedging at all.

Who can put money into a hedge fund?

Access is normally limited by law to investors who meet defined wealth, income or professional criteria, and minimum investments are often large. The exact rules depend on the country in which the fund is offered.

People Also Searched

index fund mutual fund