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A hedge fund is an investment. It is a way of investing money. Like mutual funds, hedge funds pool money from investors to try and make a profit. Unlike mutual funds, hedge funds do not have many regulations to protect investors.
Hedge fund strategies are more risky and flexible than strategies used in mutual funds. For example, they might borrow money which is called a leverage, bet on stocks they think will fall by short-selling, or use other speculative investment practices that is not often used in mutual funds.
