What do you mean by a Hedge fund?

Business & Management
#1

Hedge funds are only available to sophisticated individuals or investors because of the huge requirement of the funds. Hedge funds are always protected against the market high and lows and these funds are also responsible for the pump and dump of the stocks, hence creating a huge demand and when they have made enough profits they quit from that particular stock and result in the loss of other retail investors. Hedge funds are also managed by investment banking firms.

#2

Hedge means to safeguard, and hence in the context of investing, it means to safeguard investors against risks. Hedge funds are also pool investments from various investors, they use great complex strategies to risk and deliver high returns. Hedge funds are mostly set up as private investment limited partnerships that are open to a limited number of accredited investors and require a large number of minimum investment.

Hedge funds are mostly restricted to sophisticated investors because of the minimum tick size being 1 crore.