In the recent times, hedge funds have emerged as one of the most popular avenues around the planet. Several people are choosing to include hedge funds into their financial portfolios, so as to enjoy a high level of investment gains within a limited period of time. Hedge funds basically are a type of investment partnerships in which multiple investors pool in their money in order to enjoy great profits. Scott Tominaga says that multiple types of well-planned and effective strategies are used to generate maximum returns in case of hedge funds.
In case of hedge funds, the relevant fund managers typically “hedge” themselves by going long or shorting the stocks. This helps them to provide superior revenues and profits to investors. The involvement of competent fund managers helps the investors to ensure that their money is in safe hands, and enables them to enjoy high gains. Scott Tominaga says that fund managers usually employ a plethora of specially designed and effective hedging strategies that aid them to minimize any kind of investment risks. Tominaga has been involved in the domain of financial services industry for about two decades, and hence is well-informed about the hedge fund strategies and plans popular in the market. These strategies are designed especially for enabling both high-net-worth individuals and institutional clients to enjoy high investment gains.
The hedge funds strategies used by people tend to be dependent on their distinguished investment philosophy, as well as career interests. Here are a few of the popularly followed hedge fund strategies:
- Long/Short Equity: This is famed for being one of the most common types of equity strategies. The long/short portfolio enables the investors to purchase stocks of diverse enterprises that are usually expected to underperform. These portfolios usually have quite low correlations to the general financial market. A significant number of people tend to choose to invest in long/short portfolio as they ideally generate absolute returns, regardless of the general market performance.
- Market Neutral: The market-neutral funds are known to be similar to the long/short equity portfolio. Hence, similar to that portfolio, the market-neutral funds tend to be independent of the condition and performance of the financial market. These funds are generally focused on eliminating, or at least reducing the aspect of market volatility. The market-neutral funds are often used by investors to enhance their margin of returns, while also ensuring any kind of derivatives with the aim of hedging the overall portfolio.
- Convertible Arbitrage: The process of purchasing convertibles, and then shorting their underlining stocks tend to be one of the most effective ways to enjoy superior gains. The convertible debt is known to be a certain type of a bond that can be easily covered to stocks. In the convertible Arbitrage investment option, people can ideally purchase the convertible debt of a company, and then short-sell the stock of the same enterprise to enjoy high gains.
Scott Tominaga highlights that people can enjoy high investment gains by following the above-mentioned hedge fund strategies
