Presentation: 5 types of hedge funds

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SLIDE 1

Hedge funds can be categorized into five main investment styles.

SLIDE 2

1. Trend following

Also known as managed futures, these profit from exploiting pricing trends in a wide range of instruments such as currencies, interest rates, equities, metals, energy and agricultural commodities.

SLIDE 3

Managers get exposure to these investments through global futures markets, with over 200 standardized futures contracts that can be traded both long and short.

SLIDE 4

Discretionary managers rely on judgment and expertise to make investment decisions.

Systematic managers use mathematical models and high-frequency data analysis to identify and capture price trends.

SLIDE 5

2. Global macro

Managers capitalize on upward or downward trends across markets, asset classes and financial instruments by analyzing macroeconomic indicators and developing an investment thesis.

SLIDE 6

3. Equity hedged

Managers take offsetting long and short positions.

SLIDE 7

The long positions are on undervalued stocks, the short positions are on overvalued stocks.

This is the strategy that started the hedge fund industry.