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Hedge Fund and Trading Strategies Classification

We classify Hedge Funds the following way:

1. Global Macro (directional investment incl. Managed Futures)

1.1. Discretionary approach

1.1.1. Systematic diversified

1.1.2. Systematic currency

1.1.3. CTA

1.1.4. Other

1.2. Systematic approach

1.2.1. Systematic diversified

1.2.2. Systematic currency

1.2.3. CTA

1.2.4. Other

1.3. Mixed approach

1.3.1. Systematic diversified

1.3.2. Systematic currency

1.3.3. CTA

1.3.4. Other

2. Directional

2.1. Long/Short Equity

2.1.1. Region (according to the region selection)

2.1.2. Industry Funds (with sectors as a subgroup)

2.1.3. Other

2.2. Long bias

2.2.1. Region (according to the region selection)

2.2.2. Industry Funds (with sectors as a subgroup)

2.2.3. Other

2.3. Short bias (incl. short only)

2.3.1. Region (according to the region selection)

2.3.2. Industry Funds (with sectors as a subgroup)

2.3.3. Short only

2.3.4. Other

3. Event-driven

3.1. Distressed securities

3.2. Risk arbitrage (incl. merger arbitrage)

3.3. Credit arbitrage

3.4. Activist funds

3.5. Other

4. Relative value strategies :

4.1. Fixed Income arbitrage

4.2. Market neutral/Equity market neutral

4.3. Convertible arbitrage

4.4. Asset-backed securities with fixed income arbitrage using asset-backed securities.

4.5. Credit long/short: the same as long/short equity but in credit markets instead of equity markets

4.6. Statistical arbitrage

4.7. Volatility arbitrage

4.8. Yield alternatives: non-fixed income arbitrage strategies based on yield instead of price

4.9. Regulatory arbitrage

4.10. Risk arbitrage

4.11. Other

5. Miscellaneous

5.1. Multi-Strategy: a hedge fund using a combination of different strategies to reduce market risk.

5.2. Multi-Manager: a hedge fund wherein the investment is spread along separate sub-managers investing in their own strategy.

5.3. 130-30 funds (and similar weighting): equity funds with 130% long and 30% short positions, leaving a net long position of 100%

5.4. Risk parity: equalizing risk by allocating funds to a wide range of categories while maximizing gains through financial leveraging.

5.5. Other