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Hedge funds offer the opportunity for higher returns but also entail a correspondingly high degree of risk, as these instruments are not as transparent for the investor as traditional funds. Despite their name (to hedge means to safeguard), hedging transactions are by no means the main purpose of hedge funds. These funds are characterised by transactions which are prohibited for traditional investment funds. These include short selling securities, raw materials or foreign currency, arbitrage, stock market transactions on credit and the extensive use of derivatives. Private investors usually invest in umbrella hedge funds to improve risk distribution.

Term-Nr.: 428

German: Hedge Funds (412)

Source: Swiss Fund Guide 2010 m. e. E., 20.04.2010

Notice: The contents of this terminology collection Lawpedia® with a focus on business law (especially financial market law) have been researched with great care and compiled on the basis of an extensive flash card, training materials and literature. The various sources (as far as they could be found) can be found in the abbreviations and source references. References to other sources are welcome. Despite the care taken, the provider cannot accept any liability for the accuracy, completeness and topicality of the information provided. The information is of a general nature in particular and does not constitute legal advice in individual cases.

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