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an investing group usually in the form of a limited partnership that employs speculative techniques in the hope of obtaining large capital gains

and others free to push up the stock prices of companies that deserve it and pull down prices for others.

, 40 years after his folly, Bogles index funds reign, 23 Jan. 2019

Notwithstanding the question of whether individual billionaires are any more invested in the civic value of journalism than

, there arent enough of them to rescue all the ailing newspapers in the United States.

, The Gutting of The Denver Post is a Death Knell for Local News, 11 May 2018

published an open letter Wednesday to fellow shareholders in car-parts maker Hyundai Mobis, effectively setting up a proxy fight at next months annual general meeting.

, Elliotts Slow-Burn Proxy War With Hyundai, 27 Feb. 2019

lost more than 11% in 2018, faring worse than the S&P 500, which dropped 4.4% including dividends, according to research firm HFR.

, A Rarity on Wall Street: A Female- and Minority-Led Activist Hedge Fund, 10 Feb. 2019

Further Reading Toyotas new magnet wont depend on some key rare-earth minerals A

recently bought Mountain Pass out of bankruptcy after several companies attempted to turn a profit from it.

, Tariffs on Chinese rare-earth minerals create a sticky problem for US competitors, 30 Nov. 2018

bought the paper, another 30 newsroom staffersone-third of the staffwere laid off.

, Denver Posts Ultimate Visitors Guide to Coors Field Features Photo of Citizens Bank Park, 6 Apr. 2018

Conyers has endorsed his son, John III, who works for a private

, Race for John Conyers open seat a Democratic free-for-all, 2 Mar. 2018

executive Marc Mezvinsky in 2010 and has two children already, Charlotte, 4, and Aiden, 2.

, Chelsea Clinton Confirms Shes Pregnant With Her Third Child, 23 Jan. 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word hedge fund. Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors.Send us feedback.

Ahedge fundis aninvestmentstructure designed to allow management of a private, unregistered portfolio of assets.

The original concept of ahedge fundwas toofferplays against themarketusingshort sellingfutures, andderivatives. Today, hedge funds follow any number of strategies and cannot be considered a homogenousasset class.

Hedge funds (as an asset class) use various strategies, includingleveragehedging, and macroeconomic bets on commodities, currencies, and interest rates. The common denominator of hedge funds is not theirinvestmentstrategy but their search for absolute returns (as opposed to relative returns). Absolute return strategies focus on generating a positivereturn on investment (ROI)regardless of the direction of thefinancial markets.

Hedge fund managers seek freedom to achieve high absolute returns and wish to be rewarded for their performance. The compensation arrangement for the manager typically specifies considerableprofitparticipation. The specific legal organization of hedge funds and the considerable fee structure expected byfundmanagers are probably the only uniform characteristics of hedge funds.

Only accredited investors are eligible to invest in hedge funds. The termaccredited investorincludeswealthyindividuals and organizations like corporations, endowments, or pensionfunds. Accredited investors invest in hedge funds because they are looking forinvestmentswithnegative correlationto the broad market.

Because they operate outside the realm of the public markets and are lightly regulated, hedge funds have been declared off limits to most individual investors. Some say the lack of oversight paired with the high-risk, high-return strategies employed by most hedge funds have resulted in some of the worlds most catastrophic financial events, including the failure of Long-TermCapitalManagement in 1998 and the collapse of two Bear Stearns hedge funds in 2007.

That being said, all investors, regardless of experience and sophistication, need to perform extensivedue diligencebeforeinvestingin any hedge fund. Before investing in a hedge fund, an investor needs to consider the correlation of thefundstrategy to the rest of the investors portfolio, the reputation and success rate of thefund manager, the use ofleverage, as well as the fee schedule.

See the full definition forhedge fundin the English Language Learners Dictionary

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