'Hedge funds lite' - a rose by any other name?

In volatile times, the term 'hedge fund' has become ubiquitous. But how much do even professionals understand about this means of investing?

Until fairly recently, 'hedge fund' was not a term with which many people outside of the financial community were familiar. These days, it is hard to read a newspaper without coming across the phrase, usually in a negative context. Many hedge funds use sophisticated trading techniques, that are often difficult to explain or poorly understood, even by investment professionals. This lack of understanding has seen 'hedgies' accused of causing and exacerbating the precipitous falls experienced in most asset classes in recent months. While this may or may not be true, the increased focus, and th...