Thx for everyone answer my question, can I understand the fund hedge it like this way. Let's say a Tech company focused mutual fund have a portfolio on holding various of Tech company's stock. The Nasdaq index performance grow up 10% annually. The mutual fund expect to grow up 15% annually.

However, if Nasdaq is going to drop 3% from 10% annual growth due to the volatility/bear market which given Nasdaq only have 7% annual growth. At the same time, the mutual fund will more likely to drop 10% from 14% annual growth after the valuation model if hedging strategy doesn't applied, which only give the fund to have 4% annual return. If the fund is willing to sacrifice the 3% to go short to hedge the Nasdaq futures, then the fund will be more likely to keep it at 7% annual return if bear market is occured. The mutual fund will still have 11% annual return after the fund use 3% to hedge the risk.

Therefore, the mutual fund manger is happy to satisfy the investor whether it is bear or bull market, since the fund will either equal the performance of Nasdaq index during bear market, or outperform the Nasdaq index 1% more during the bull market. I am not sure whether I am correct or not, this is just a guess. Do anyone kindly provide me some more example that hedging/other factor that can give us the consistent edge in stock index futures?