For example, managing futures (reasonable leverage), such as market neutral strategy or FOF strategy, has relatively low risk.
Stock strategy: including stock long strategy and stock long and short strategy.
1, stock long strategy: pure stock long strategy refers to the fund manager buying stocks at low prices based on his optimism about some stocks, and then selling them when the stocks rise to a certain price to obtain the difference income.
2. Stock long-short strategy: add hedging tools such as securities lending, stock index futures and options to the portfolio, including alpha strategy, hedging strategy and trend strategy. Alpha strategy is to completely expose the beta value of the stock portfolio by holding long positions in the stock portfolio and shorting the stock index futures, so as to achieve complete market neutrality. The rise and fall of the net value of such funds is basically unaffected by market fluctuations, and the income mainly comes from the excess income of the stock portfolio outperforming the broader market. The operation method of hedging strategy is similar to that of alpha strategy, but different from alpha strategy, this strategy is not based on eliminating Beta, but shorting stock index futures when the market drops sharply, so as to achieve the purpose of hedging and reducing the net value of funds. Trend strategy involves the two-way operation of long-short investment in individual stocks and stock index futures, aiming at increasing the income range when there is a clear trend in individual stocks or the whole market. The long-short strategy of individual stocks is to hold undervalued stocks and sell overvalued stocks, so that both bull markets and bear markets can benefit. In addition, some institutions expand their income through two-way investment in stock index futures.
Comments: The stock bull market strategy requires fund managers' ability of stock selection and timing, and the income is greatly affected by market conditions, with large fluctuations, high risks and high returns. After the gradual loosening of domestic stock index futures, the long-short strategy of stocks has more room for development. The advantage of alpha strategy is that the net value fluctuates little, which is very prominent in the volatile and falling market. The biggest risk of this strategy is that the stock portfolio fails to outperform the market index, so it is a great test for the fund manager's stock selection method and ability. At present, due to the lack of securities lending resources and high cost in China, there are few funds that use individual stock hedging strategy.
Macro strategy: 1. Commodities: The fund of this strategy makes several short positions according to the predicted price trend by studying the actual supply and demand relationship of commodities. 2. Macro hedging strategy is mainly based on the study of domestic and global macroeconomic situation. When it is found that a country's macroeconomic variables deviate from the equilibrium value, the fund manager will concentrate on predicting the trend of related varieties.
Comments: Macro hedging strategy involves a variety of investments, including stocks, bonds, stock index futures, treasury bonds futures, commodity futures, interest rate derivatives and so on. In operation, it is a combination of multiple empty positions, and the profit is increased in a certain period of time by using certain leverage. At present, subject to domestic foreign exchange control and imperfect interest rate market, macro hedge funds are less involved in foreign exchange varieties.
Custody futures: the most decentralized investment strategy, which can provide diversified investment opportunities, covering commodity futures, stock index futures, treasury bonds futures and other varieties, and make multiple short positions according to the predicted price trend. Divided into subjective futures and programmed futures. The decision-making of programmed futures funds generally depends on computer programs, which can maintain a low correlation with traditional investment varieties and achieve the purpose of fully dispersing the overall portfolio risk.
Comments: High risks are accompanied by high returns and are not affected by market conditions.
Event-driven: arbitrage is carried out by analyzing the different effects on investment targets before and after major events. Fund managers generally need to estimate the probability of an event and its impact on the underlying asset price, intervene in advance to wait for the event to happen, and then choose the opportunity to quit. It mainly includes private placement, mergers and acquisitions, participation in new shares, hot topics and special events.
Comments: Private placement products in event-driven strategy are generally closed for 1.5-3 years, which is worse than general private placement products.
Relative value: what we usually call arbitrage strategy. The core of arbitrage is to use the wrong pricing of securities assets, that is, to buy relatively undervalued varieties and sell relatively overvalued varieties to obtain risk-free returns. Arbitrage strategy will generally combine long and short means to achieve market neutrality. The advantage is that the net value fluctuation is small, but when the market variety fluctuates greatly, arbitrage funds are prone to losses. Arbitrage strategies mainly include cash arbitrage, cross-market arbitrage and cross-variety arbitrage.
Comments: Because arbitrage opportunities are usually fleeting, it is very important to explore and seize opportunities. Arbitrage strategy has a small profit margin, and generally requires leverage or other strategic assistance to have considerable benefits. However, more arbitrage will only accelerate the correction of market prices. As the market becomes more and more perfect, the opportunities and space for arbitrage will gradually shrink.
Fixed income: the main investment bonds, with absolute income as the goal. Because bond prices are sensitive to interest rate changes, fund managers need to adjust the interest rate risk exposure of bond portfolios. With the introduction of treasury bond futures, portfolio can be combined with treasury bond futures to reduce net value fluctuation. Fixed-income funds usually have a small income space and need to cooperate with leverage to increase the income range.
Comments: the fluctuation of net value is small, which reduces the risk and has limited income space.
Portfolio strategy: Similar to FOF of public funds, professional institutions usually screen private funds and construct a reasonable fund portfolio, thus realizing the allocation between funds.
Comments: The advantage of this strategy is that multiple funds can participate in different strategies at the same time, and their performance is relatively stable.
Compound strategy: With the increase of futures varieties and the wide application of hedging strategies, many sunshine private equity institutions combine various investment strategies in order to increase profit space. The operation mode varies according to the fund manager's ability circle. For example, private placement and commodity futures will be absorbed at the same time, and composite investment will be made in two areas with extremely low correlation; There can also be a multi-strategy manager model to allocate fund assets to different managers.
Comments: Multi-strategy comprehensive application, risk diversification, relatively stable performance.