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Presentation – 5 types of hedge funds
To make it easier for you to prepare meeting materials, we’ve developed these slides about the 5
types of hedge funds. The presentation is in a Word file to make it simpler to customize content to
meet your clients’ information needs.
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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.
SLIDE 8
4. Event driven
Investment decisions are triggered by specific events, including corporate actions such as
bankruptcies, asset sales, mergers or takeovers.
SLIDE 9
5. Arbitrage
This refers to opportunities resulting from the mispricing of related assets.
SLIDE 10
Managers are able to exploit the expected convergence of these prices by taking a short position
in the overvalued asset and a long position in the undervalued asset, producing profits regardless
of the overall market direction.
SLIDE 11
END