What Are Hedge Funds and How Do They Work?

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If you’ve recently started to dip a toe into the world of investing, it’s highly likely that you’ve heard of hedge funds. But their name doesn’t give much away. So what exactly are these investment relationships? Put simply, a hedge fund is a financial partnership in which members pool their funds and earn active returns through a variety of different investment strategies — but that’s not all they do. To boost your understanding of what hedge fund investments involve, take a deeper dive into how hedge funds got started, how they work and how they're structured.