Write the meaning of hedge funds.

Hedge funds are private, aggressively managed investment pools that use a wide range of strategies—including leverage, short selling, derivatives, and arbitrage—to generate high returns for their investors. Unlike traditional mutual funds, hedge funds are not publicly traded, are exempt from many regulatory restrictions, and are only accessible to accredited investors (e.g., high-net-worth individuals, institutions, or qualified purchasers). Their primary goal is absolute returns (profit regardless of market conditions) rather than benchmark-based performance. Hedge funds operate with flexibility in asset allocation, allowing managers to exploit market inefficiencies, volatility, and macroeconomic trends. They often charge performance-based fees (e.g., 2% management fee + 20% of profits). Due to their high risk and complexity, they are primarily used by sophisticated investors seeking diversification and alternative exposure.