What is a hedge fund?

It’s a fund that can take both long and short positions, use arbitrage, buy and sell undervalued securities, trade options or bonds, and invest in almost any opportunity in any market where it foresees impressive gains at reduced risk.


There is no clear statutory or legal definition of a hedge fund in any of the relevant legislation.

–Pooled investment vehicle that are privately organised , administrated by professional investment managers, and not widely available to the public.

–Funds that utilise some form of short asset exposures or short selling to reduce risk or volatility, preserve capital or enhance retuns.


•Institutional and sophisticated investors are realising that hedge funds can and should form a key component of any investment portfolio if they are to achieve optimal returns.

•Its been referred to as a guard against the risk of loss and a “fund” as a reserve of money set aside for a certain purpose.