what is a hedge fund? 

Hedge funds are considered unique investments in the world of personal finance, in simple terms, they are nothing more than an investment vehicle similar to a mutual fund.

The popularity of hedge funds has exploded over the last few decades, and there are now almost 4 trillion dollars invested in hedge funds worldwide.

A hedge fund is a partnership between a professional fund manager and investors. The manager and investors pool money into a fund, using different strategies to grow it.

What Is A Hedge Fund?

While there are hundreds of strategies employed by hedge funds to generate returns for their investors, most can be grouped into four main categories: – Global macro – Directional – Event-driven – Relative value

Hedge Fund Strategies

An event-driven hedge fund strategy seeks to identify risks and opportunities in specific events and make trades that pay off if those risks or opportunities are realized.

Event-Driven Strategy

Investopedia defines arbitrage as “the simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the asset’s listed price.

Relative Value