Hedge Fund [ hej-fuhnd ]
an investment partnership that uses high-risk, speculative methods to obtain large, short-term profits.
To hedge means to safeguard, and in the context of investing, it means to protect against risks.
A hedge fund is an investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction and risk management techniques to improve performance, such as short selling, leverage, and derivatives.
Hedge funds are generally seen as aggressive and risky, particularly when compared to mutual funds.