Hedge Fund Strategies

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    06-May-2015
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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

  • 1.Hedge Fund Strategies

2. 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 3. 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 4. 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 5. 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. 6. 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. 7. Knowledge is like a line With no ends So To know in detail about this article click on the link below http://www.educorporatebridge.com/hedge- fund/hedge-fund-strategies 8. 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 9. Thank You!!! If you have found this Presentation to be useful, kindly Like Share Follow us!!! +