Hedge Fund Origin

Hedge Fund Origin

Q&A: Where did the name hedge fund come from?

Hedge Fund OriginAlfred W. Jones is credited with coining the term "hedge fund" in 1949. Jones was the first known to employ portfolio managers while turning his company into a limited partnership. He outperformed his competitors by hedging his investments.

Jones used two strategies to minimize risk: using leverage to purchase stocks, and short selling to minimize risk. Thus, Jones hedged the market risk.

- Richard

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