What is hedge fund?

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Hedge funds are alternative investments using pooled funds that employ numerous
different strategies to earn active return, or alpha, for their investors. Hedge funds
may be aggressively managed or make use of derivatives and leverage in both domestic
and international markets with the goal of generating high returns (either in an absolute
sense or over a specified market benchmark). One aspect that has set the hedge fund
industry apart is the fact that hedge funds face less regulation than mutual funds and other
investment vehicles.