This strategy is identified by hedge investing in the convertible securities of a company. A typical investment is to be long the convertible bond and short the common stock of the same company. Positions are designed to generate profits from the fixed income security as well as the short sale of stock, while protecting principal from market moves.

Fund managers in this non-traditional strategy invest in the debt, equity or trade claims of companies in financial distress or already in default. The securities of companies in distressed or defaulted situations typically trade at substantial discounts to par value due to difficulties in analyzing a proper value for such securities, lack of street coverage, or simply an inability on behalf of traditional investors to accurately value such claims or direct their legal interests during restructuring proceedings.

Emerging Markets

This strategy involves equity or fixed income investing in emerging markets around the world. Because many emerging markets do not allow short selling, nor offer viable futures or other derivative products with which to hedge, emerging market investing often employs a long-only strategy.

Equity Long Bias

Equity Long/Short managers are typically considered long-biased when the average net long exposure of their portfolio is greater than 30%.

Equity Long/Short

This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. Managers may use futures and options to hedge. The focus may be regional or sector specific.

Market Neutral

This investment strategy is designed to exploit equity market inefficiencies and usually involves being simultaneously long and short matched equity portfolios of the same size within a country. Market neutral portfolios are designed to be either beta or currency neutral, or both. Well-designed portfolios typically control for industry, sector, market capitalization, and other exposures. Leverage is often applied to enhance returns.

Equity Short Bias

Short biased managers take short positions in mostly equities and derivatives. The short bias of a manager's portfolio must be constantly greater than zero to be classified in this category.

European Equities

This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. Managers may use futures and options to hedge. The focus is regional and includes only funds that have a minimum portfolio allocation of 90% to the countries of Western Europe including the U.K.

Event Driven

This strategy is defined as 'special situations' investing designed to capture price movement generated by a significant pending corporate event such as a merger, corporate restructuring, liquidation, bankruptcy or reorganization.

Fixed Income Arbitrage

The fixed income arbitrageur aims to profit from price anomalies between related interest rate securities. Most managers trade globally with a goal of generating steady returns with low volatility. This category includes interest rate swap arbitrage, US and non-US government bond arbitrage and forward yield curve arbitrage.

Fund of Funds

Fund of Funds are funds that invest in two or more other funds. The objective is to enable the fund and its underlying investors to broadly diversify.

Global Macro

Global Macro managers carry long and short positions in any of the world's major capital or derivative markets. These positions reflect their views on overall market direction as influenced by major economic trends and or events. The portfolios of these funds can include stocks, bonds, currencies, and commodities in the form of cash or derivatives instruments. Most funds invest globally in both developed and emerging markets.

Healthcare & Biotechnology

This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. Managers may use futures and options to hedge. The focus is sector specific and concentrates on the Healthcare & Biotechnology sectors.

Merger Arbitrage

Merger Arbitrage funds typically invest simultaneously long and short in the companies involved in a merger or acquisition. Risk arbitrageurs are typically long the stock of the company being acquired and short the stock of the acquirer. By shorting the stock of the acquirer, the manager hedges out market risk, and isolates his exposure to the outcome of the announced deal.

Multi Strategy

Multi-Strategy funds are characterized by their ability to dynamically allocate capital among strategies falling within several traditional hedge fund disciplines. The use of many strategies, and the ability to reallocate capital between them in response to market opportunities, means that such funds are not easily assigned to any traditional category.

Pacific Rim

This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. Managers may use futures and options to hedge. The focus is regional and includes only funds that have a minimum portfolio allocation of 90% to the countries of the Pacific Rim including Japan and Australia .

Technology

This directional strategy involves equity-oriented investing on both the long and short sides of the market. The objective is not to be market neutral. Managers have the ability to shift from value to growth, from small to medium to large capitalization stocks, and from a net long position to a net short position. Managers may use futures and options to hedge. The focus is sector specific and concentrates on the Technology sector.

Disclaimer

The above terms, definitions, statistical measures and descriptions are intended for informational and educational purposes only.This information is summary and general in nature, is not complete, and may not be applicable to, or representative of, a particular hedge fund, the strategies it uses, or its sector category.The strategies employed, and comparative benchmark selected (if applicable), by a particular hedge fund are selected, interpreted and implemented by such hedge fund’s manager or advisor solely in its discretion and may be selected, interpreted and implemented in a manner substantially different from any benchmark or strategy as set forth below.This information should not be acted or relied upon in place of the disclosures (including risk disclosures) set forth in a hedge fund’s offering documents.Investors must carefully review a hedge fund’s offering documents to obtain information about a particular hedge fund including a complete description of its strategy, comparative benchmark (if applicable) and definitions relevant to such fund.A sector category has been assigned to each fund [by the fund] [by Barclay Trading Group, Ltd.]Certain information has been provided by Barclay Trading Group, Ltd. and other third-party sources and, although believed to be reliable, it has not been independently verified and its accuracy or completeness cannot be guaranteed.We make no express or implied warranty, representation or guarantee as to the accuracy, validity, timeliness, completeness or suitability of any of the following information.This information may not be updated to correspond to updated information that otherwise may be obtainable from Barclay Trading Group, Ltd.We are not affiliated with Barclay Trading Group, Ltd.Financial indicators, indices and benchmarks are unmanaged, may not reflect any advisory or management fees, assume reinvestment of income, are for illustration purposes only, and have limitations when used for comparison or other purposes because they may have volatility, credit, or other material characteristics that are different from a particular hedge fund or hedge fund strategy.For example, a specific hedge fund may, directly or indirectly, hold substantially fewer securities than are contained in an index, may implement a particular strategy differently than the way an index interprets such strategy, or an index may contain securities or types of securities that are not comparable to those traded by the hedge fund.Therefore, for these and other reasons, a hedge fund’s performance may differ substantially from the performance of any index, even one designated as a comparative benchmark for such fund.