Which of the following entities is not subject to the Investment Company Act of 1940?

The Investment Company Act of 1940 is a key piece of U.S. legislation that regulates the organization and activities of investment companies. It primarily aims to protect investors by ensuring transparency and fair practices in the management of investment vehicles, including mutual funds, exchange-traded funds (ETFs), and closed-end funds, all of which are categorized as investment companies under this act.

Hedge funds, on the other hand, operate differently. They typically do not have the same level of regulatory oversight as mutual funds and similar investment companies because they often limit their investors to accredited individuals or institutions. This exclusivity allows hedge funds to benefit from certain exemptions under the Investment Company Act. As a result, while hedge funds may involve complex investment strategies and higher risks, they are generally not considered "investment companies" and are thus not subject to the stringent requirements of the 1940 Act.

The other entities mentioned—mutual funds, exchange-traded funds, and closed-end funds—are all structured as investment companies and are thus fully subjected to the provisions of the Investment Company Act. These funds must comply with regulations around their operations, disclosures, and reporting, providing investors with a layer of protection not afforded to hedge funds.