Hedge Fund Strategies

10
Hedge Fund Strategies

description

For full text article go to : http://www.educorporatebridge.com/hedge-fund/hedge-fund-strategies/ This article on Hedge Fund Strategies, list down various strategies that are used by an Hedge fund Manager

Transcript of Hedge Fund Strategies

Page 1: Hedge Fund Strategies

Hedge Fund Strategies

Page 2: Hedge Fund Strategies

• In this type of Hedge Fund Strategies, Investment managers maintain long and short positions in equity and equity derivative securities.

• It can range broadly in terms of exposure, leverage, holding period, concentrations of market capitalizations and valuations.

• Basically the fund goes long and short in two competing companies in the same industry based on their relative valuations.

Long/Short Equity

Page 3: Hedge Fund Strategies

• By contrast, in market-neutral hedge funds target zero net-market exposure which means that shorts and longs have equal market value.

• In such a case the managers generate their entire return from stock selection.

• This strategy has a lower risk than the above strategy but at the same time the expected returns are also lower.

Market Neutral

Page 4: Hedge Fund Strategies

• In such a hedge fund strategy the stocks of two merging companies are simultaneously bought and sold to create a riskless profit.

• This particular hedge fund strategy looks at the risk that the merger deal will not close on time, or at all.

• Because of this small uncertainty, the target company's stock will sell at a discount to the price that the combined entity will have when the merger is done.

• This difference is the arbitrageur's profit.

Merger

Arbitrage

Page 5: Hedge Fund Strategies
Page 6: Hedge Fund Strategies

Global Macro

• This hedge fund strategy aims to make profit from large economic and political changes in various countries by focusing in bets on interest rates, sovereign bonds and currencies.

• Investment managers analyze the economic variables and what impact they will have on the markets. Based on that they develop investment strategies.

Page 7: Hedge Fund Strategies

• This particular Hedge fund strategy makes profit from arbitrage opportunities in interest rate securities.

• Here opposing positions are assumed in the market to take advantage of small price inconsistencies, limiting interest rate risk.

• The most common type of fixed-income arbitrage is swap-spread arbitrage.

Page 9: Hedge Fund Strategies

https://www.facebook.com/CorporateBridgeGroup

Be a part of edu CBA Family!!!

Visit our website

For Free Resources

Like us on Facebook

Follow us on Twitter

https://www.educorporatebridge.com/

https://www.educorporatebridge.com/free-courses/

https://twitter.com/corporatebridge

Page 10: Hedge Fund Strategies

Thank

You!!!

If you have found this Presentation

to be useful, kindly

Like

Share

Follow us!!! +