What is the difference between a hedge fund and a mutual fund?

The difference between a hedge fund and a mutual fund lies mainly in the types of investments they offer and the way those investments are managed. A mutual fund pools money from many investors and invests it in stocks, bonds, and other types of securities. The fund is managed by a professional fund manager, who chooses the investments. Mutual funds generally have low risk and low return. A hedge fund is a more aggressive type of investment fund, usually with higher risk and higher return potential. Hedge funds use a variety of strategies to manage their investments, including buying and selling stocks, futures, commodities, and currencies. Also, they use leverage, where they borrow money to increase the size of their investments. Hedge funds are only available to wealthy investors and typically have high management fees. The laws governing these two types of funds are very different. In Virginia, hedge funds must register with the State Corporation Commission as a limited liability company (LLC). Mutual funds in Virginia are regulated by the Investment Company Act of 1940 and the Securities and Exchange Commission. They must register with the SEC and must follow certain disclosure and reporting requirements.

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What is the difference between a hedge fund and a mutual fund?

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