Hedge funds look for investments that will provide returns from declining markets as well as rising ones, and they often bundle their investments in complex combinations of positions to provide high returns. (BBC Home)

Funds of hedge funds and hedge funds may invest in highly illiquid securities that may be difficult to value. Moreover, many hedge funds give themselves significant discretion in valuing securities. (US Securities and Exchange Comission)

Like mutual funds and other securities market participants, hedge funds are subject to prohibitions against fraud, and their managers have the same fiduciary duties as other investment advisers. (Investment Company Institute)