What Is a Hedge Fund?

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Risk Management

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Before we mentioned that the word “hedge” means protection against a loss by involvement in more than one part of an event that might cause this loss. Well, hedge funds usually use diversification of their portfolios in order to be able to cover for some losses that might occur. After all, the hedge fund is making money based on speculation, which is highly risky, so diversification remains one of the most efficient strategies in risk management.

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