A look at some useful hedge fund strategies

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Scott Tominaga 0f PartnersAdmin LLC has been in the hedge funds industry for almost 20 years. He has seen how hedge fund investment has become one of the driving forces in the investment management industry and an integral part of Wall Street’s history. In today’s blog, Scott Tominaga shares some of the more useful hedge fund strategies he has learned throughout his career. 1. Long/short equity

As the name implies, the strategy involves maintaining long and short positions in equity and equity derivative securities. Scott Tominaga mentions that this is achieved by purchasing stocks that seem to be undervalued and selling short stocks that are deemed overvalued.

2. Market neutral

This strategy is similar to long/short equity but has a lower risk and lower expected returns. It uses the same concept. Exposure to the broad market, however, is minimized by having equal market values of investment in both long and short positions to ensure that net exposure is equivalent to zero.

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3. Global macro

The global macro strategy may have the highest risk-return profile of any hedge fund strategy because it deals with investing sizably in shares, bonds, currency markets, commodities, and other similar derivative securities. Scott Tominaga has mentioned before that managers who use this strategy utilize macroeconomic analysis based on global economic and political events and trends to determine which asset classes to invest in.

Scott Tominaga is the COO of PartnersAdmin LLC, a company that employs a team of experts that have hands-on experience needed in solving the challenging operational issues faced by alternative funds managers. Read more discussions about the industry by subscribing to this blog.