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Hedge Fund Strategies
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Managed Futures
Uses derivatives like futures and options to speculate on the future price of assets, often using algorithms and trend-following strategies.
Short Only
A predominantly bearish investment strategy that involves only short-selling stocks that are expected to decrease in value.
Relative Value
Aims to exploit price differences between related financial instruments, such as between stocks and options, or between bonds of differing credit quality.
Event-Driven
Strategy seeking to exploit pricing inefficiencies caused by events such as mergers, acquisitions, bankruptcy, or another significant corporate event.
Sector Specific
Focuses on investing within a specific sector of the economy, such as technology, healthcare, or energy.
Activist
Invests in companies with the aim of obtaining significant influence to enact changes that increase shareholder value.
Capital Structure Arbitrage
Seeks to profit from mispriced securities within a company's capital structure, such as between a company's debt and equity.
Distressed Securities
Involves purchasing securities of companies that are in financial distress or bankruptcy.
Momentum
Invests in securities that have had high returns over the past 3 to 12 months, and sells those that have had poor returns over the same period.
Volatility
Seeks to profit from volatility in market prices, often by trading options or volatility indices.
Quantitative
Employs mathematical and statistical methods to identify trading opportunities, often executing orders through automated systems.
Convertible Arbitrage
Strategy of taking a long position in a company's convertible bonds or preferred shares and a short position in its common stock.
Long/Short Equity
This strategy involves taking long positions in undervalued stocks and short positions in overvalued stocks.
Global Macro
Focuses on investing in global markets, including stocks, bonds, currencies, and commodities, based on economic and political views.
Currency
Involves trading strategies that capitalize on perceived pricing inefficiencies in the currency markets, often involving leverage.
Market Neutral
Aims to negate the influence of market movements on portfolio performance by balancing long and short positions so that the beta of the long positions is offset by the short.
Credit
Invests in fixed-income securities and seeks to take advantage of differences in credit spreads between various debt instruments.
Fixed-Income Arbitrage
Aims to exploit pricing differences in the fixed-income securities of the same company or similar companies.
Inflation Protection
Investing in assets that are expected to maintain or increase their value over time despite rising inflation.
Merger Arbitrage
Takes advantage of price discrepancies that occur before and after a merger or acquisition announcement.
Growth
Focuses on investing in companies that are expected to grow at an above-average rate compared to their industry or the overall market.
Emerging Markets
Strategy that focuses on investing in the securities of countries with emerging economies, often seeking high rates of growth.
Risk Arbitrage
A form of event-driven investment designed to profit from merger and acquisition situations, involving simultaneous purchase and sale of the stocks of two merging companies.
Regulatory Catalyst
Seeks to profit from regulatory events including approvals of drugs, changes in regulation, or antitrust suits which affect the prices of securities.
Dedicated Short Bias
This strategy is characterized by maintaining net short exposure to the market through short-selling equities.
Fund of Funds
Invests in a variety of hedge funds to provide broad exposure to different strategies and managers.
PIPE (Private Investment in Public Equity)
Involves purchasing private equity in a public company, usually at a discount to the current market valuation, in order to support the company with capital.
Value
Involves picking stocks that appear to be trading for less than their intrinsic or book value.
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