How are hedge funds different from mutual funds?

Hedge funds and mutual funds are both investment vehicles that pool money from multiple investors to invest in various assets. However, there are several key differences between the two:

1. Investment Strategies: Hedge funds use a wider range of investment strategies, including longshort equity, global macro, and eventdriven strategies. Mutual funds typically invest in a more limited range of assets, such as stocks, bonds, and money market instruments.

2. Leverage: Hedge funds often use leverage to amplify returns, while mutual funds typically do not.

3. Investor Eligibility: Hedge funds are typically only available to accredited investors, who are highnetworth individuals or institutional investors. Mutual funds, on the other hand, are available to anyone.

4. Liquidity: Mutual funds are generally more liquid than hedge funds, meaning investors can buy and sell shares more easily.

5. Fees: Hedge funds typically charge higher fees than mutual funds, including a management fee and a performance fee based on the fund's returns. Mutual funds generally charge only a management fee.