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Hedge fund - Coggle Diagram
Hedge fund
Equity-related
Long/short equity
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• Liquid, diverse
• Transparent: mark-to-market pricing
• Reduces beta risk
• Potential alpha and reduced portfolio volatility
Variable - the more market-neutral the strategy approach, the more leverage is used to achieve a meaningful return profile.
Dedicated short bias
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Activist short selling is a strategy whereby managers take a short position in a given security and then publicly present their research backing the thesis.
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Low - Due to the nature of short position, there is no need to add more leverage
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Event-driven
Merger arbitrage
Merger arbitrage strategies attempt to earn a return from the uncertainty that exists in the market during the time between acquisition announcement and completion.
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Thành công: short mẹ, long con
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Sharpe ratios tend to be high, usually produce relatively steady returns.
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Distressed securities
Distressed securities strategies take positions in the securities of companies that are experiencing financial difficulties.
• Return profile is typically at the higher end of event driven strategies
• Attractive in the early stages of an economic recovery
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Relative value
Fixed income arbitrage
Fixed-income arbitrage strategies take advantage of temporary mispricing of fixed-income instruments.
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Opportunistic
Global macro
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Return Lumpy and uneven return streams than other strategies, higher levels of volatility.
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Managed futures
Leverage High Liquidity Extremely liquid Attractiveness Positive skewness in periods of market stress → Useful in balancing negatively-skewed strategies
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Specialist
Volatility strategies
Volatility trading hedge fund managers trade volatility-related assets globally, across countries and across asset classes, in order to exploit perceived differences in volatility prices.
nhiều sản phẩm, đòn bẩy cao
• Long volatility position is useful for hedging • Negatively correlated with equity return → Diversification • Useful source of alpha return • Short side: steadier returns in normal market environment
Principle: Source and buy cheap volatility and sell more expensive volatility while netting out the time decay aspects associated with options portfolios.
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Multi-manager
Multi-strategy
Multi-strategy hedge funds combine multiple hedge fund strategies to produce steady, low-volatility returns. Sub-funds in multi-strategy hedge funds run by the same organization.
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Limited scope of strategies offered due to available pool of in-house manager Limited liquidity for investor due to lock-up periods
Fund-of-funds
Fund-of-funds (FoF) managers aggregate investors’ capital and allocate it to a portfolio of separate, individual hedge funds following different, less correlated strategies.
Advantages: • Diversification across many hedge fund strategies. • Expertise in individual manager selection. • Strategic allocation and style allocation. • Better liquidity relative to individual hedge funds. • Access to certain closed hedge funds.
Disadvantages: • A second layer of fees for the investor. • Lack of transparency into individual hedge funds. • No netting of performance fees. • Additional principal–agent issues.
Leverage High, return vững mà thấp
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