Officially, the rules prohibit funds based on derivatives such as futures and options. This creates funds of funds which, promoters claim, reduce the risk. Hedge funds can be used for more than out and out gambling. Other stock and share Isas will just fall in value. Hedge funds offer an extra choice.
Fund managers pick a sector, for example, oil.
It's a bet on quality coming out on top. Sell the shares using futures and options. Then wait for nature to take its course. Investing outside the shares market. Managers can opt for commodities, bonds, or mortgage or credit card loan backed securities.