Our Glossary
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| Hedge Funds | Funds with various – mostly very risky strategies, which invest in almost all financial and commodity instruments and in almost all regions and are thus not subject to such strict supervision as the other funds. The choice of strategy and hence the results of the fund are up to the fund manager. Very often, these funds make use of the so-called leverage effect (which means that great yields, but also great losses can be achieved with just a small investment). |
| Hedging/Hedge | Reduction of risk (hedging against risk) of the initial investment (or one’s own production) by purchasing an investment instrument with reverse correlation to the hedged risk. |
| High Yield Funds | Mutual funds focusing on investments in less valuable bonds, which, however, can produce very attractive yields. Due to less creditworthy issuers, there is a real risk that any of the issuers fails to meet its obligations. |