what are hedge funds... are they more better than etf or unit trust?

Hedge funds are just one particular type of managed fund / unit trust.

While there is no standard definition of hedge funds, they are characterised by use of complicated strategies involving leverage (borrowing), derivatives and short positions. Given the relative complexity of underlying investment approach, hedge funds are all custom and not suitable for general public (and hence need AI status to invest).

As an asset class they were exceptionally hot in the 80s/90s but as time has passed markets have become more efficient and previous strategies no longer provide outperfomance. Warren Buffett famously made a bet in 2008 that certain set of hedge funds well known at the time would not outperform S&P500. It wasn't even close. By 2015, one of the hedge fund guys was leaving industry but the gap was so large, both sides agreed the hedge funds couldn't catch up and didn't bother with an adjustment for the leaving fund.

Since then not much has changed, look on Bloomberg and you will see from time to time a hedge fund complain about the rise of algo/quant trading making life really tough for them.

The tldr - not for average investor and no big outperformance you are missing out on.

Hedge funds, like what Sandra has mentioned, require you to be an accredited investor, meaning that not any retail investor with 10k in his pocket can choose to invest in them. You have to be a high net worth investor!

As to if they are better or not, it depends on your investment goals. Assuming lets say you get a windfall of 10 million dollars right now, and you have met the criterias of being an accredited investor, AND you are looking for an aggressive fund that takes highly leveraged positions by dealing with derivatives (instruments whose value is determined by the underlying stock/bond eg. options, swaps) and shorting for potential high returns, then I guess they are a better fit for your investment goal.

However, I'm taking a guess that you don't exactly fit that criteria at this moment. But don't worry! mutual funds and etfs have much lower barriers to entry, and you still can search for an aggressive mutual fund, just no where close to that of a hedge fund, in order to fulfil your high returns goal.

I'm no where at that level to be able to invest in a hedge fund either, and I may never be, but the most important thing is that we know what our investment goals are, and how much risk are we willing to take! understanding oneself is the first step in becoming a successful investor, no matter if you invest in just etfs, bonds, mutual funds, or hedge!