The third upper category is known as "opportunistic strategies". This hedge fund strategy attempts to adjust its securities positions to various movements executed in international capital markets. This super category includes the following strategies:
- Long/Short Equity
- Emerging Markets
- Dedicated Short Bias
- Global Macro
Global Macro managers create their speculations based on a so-called top-down approach, taking advantage of global directional changes in prices of some specific asset classes. Long/short equity hedge funds, on the other hand, use a bottom-up approach designed to identify individual highly attractive investments. Emerging markets hedge funds, on the other hand, invest only in emerging markets, while dedicated short bias focuses on short positions. Fundamentally, opportunistic hedge fund strategies differ from market-neutral and event-driven strategies in that they seek to profit from specific market movements. The success - or failure - depends mainly on the hedge fund managers themselves: if they are able to anticipate the market movements correctly, the return is correspondingly high. After all, it is not small price movements that are targeted, but fundamental price differences and ongoing trends that are the goal of the research and anticipation. These hedge fund strategies deliberately take certain systematic risks and therefore have the highest volatility of the three strategy groups.
The Global Macro strategy speculates on strong, fundamental changes in the direction of certain asset classes - and of course their prices - worldwide. A top-down approach is followed: Ultimately, hedge fund managers speculate on economic trends and then bet not on individual securities, but directly on entire asset classes. For example, changes in economic forecasts are then analyzed, but the impact of political events is also taken into account - particularly with regard to how these events may affect the economies of the countries concerned. The goal is to identify macroeconomic trend changes as early as possible and then exploit them profitably.
In Dedicated Short Bias strategies, on the other hand, securities in https://thaiexness20.com/ are valued and the versions deemed to be overvalued are sold short. Securities are also borrowed from third parties and then sold in the market. The profit itself is made when the securities sold in this way are bought back at a later date at a lower price, thus making a profit margin. The short sale is composed of a total of four different legal transactions, two of which relate to the reduction and two to the build-up of the position. When building up the short sale positions, in the first step the short seller will first borrow shares from a securities lender for a fee. However, collateral must of course be deposited in addition to the fee. The shares borrowed in this way are then sold on the market and then the hope is that share prices will fall - at which point the shares are bought back and returned to the lender.
Hedge fund strategies that invest in so-called emerging markets are grouped under the "emerging markets" strategy. Here, investments are made in bonds or shares of these countries and speculation is made that these countries will experience positive economic development. Short sales or the use of derivatives are almost never resorted to, as they are only possible in the rarest of cases - these are almost always pure buy-and-hold strategies. Emerging markets are countries that are on the verge of transitioning from third-world countries to industrialized nations, and thus can have tremendous economic growth. However, there are also high political and economic risks at the same time, and unstable economic and legal systems also factor in there.
Long/short equity strategies, on the other hand, include both long and short positions in the futures and cash markets. This hedge fund strategy simultaneously buys undervalued stocks and sells short undervalued stocks. The ultimate goal is to speculate on the price of the stock deemed undervalued to rise, while the price of the overvalued stock is expected to fall. This strategy is very similar to the Equity Market Neutral strategy and so there are two styles here as well: Fundamental Long/Shorts Funds and Quantitative Long/Shorts Funds.
