Convertible Arbitrage involves purchasing a portfolio of convertible securities, generally convertible bonds, and hedging a portion of the equity risk by selling short the underlying common stock.

Distressed Securities strategies invest in, and may sell short, the securities of companies where the security's price has been, or is expected to be, affected by a distressed situation. This may involve reorganizations, bankruptcies, distressed sales and other corporate restructurings.

Emerging Markets funds invest in securities of companies or the sovereign debt of developing or "emerging" countries. "Emerging Markets" include countries in Latin America, Eastern Europe, the former Soviet Union, Africa and parts of Asia.

Equity Hedge investing consists of a core holding of long equities hedged at all times with short sales of stocks and/or stock index options. Some managers maintain a substantial portion of assets within a hedged structure and commonly employ leverage. Equity Market Neutral investing seeks to profit by exploiting pricing inefficiencies between related equity securities, neutralizing exposure to market risk by combining long and short positions. Equity Non-Hedge funds are predominately long equities although they have the ability to hedge with short sales of stocks and/or stock index options. These funds are commonly known as "stock-pickers."

Event-Driven is also known as "corporate life cycle" investing. This involves investing in opportunities created by significant transactional events, such as spin-offs, mergers and acquisitions, bankruptcy reorganizations, recapitalizations and share buybacks.

Fixed Income: Arbitrage is a market neutral hedging strategy that seeks to profit by exploiting pricing inefficiencies between related fixed income securities while neutralizing exposure to interest rate risk.

Fixed Income: Convertible Bonds funds are primarily long only convertible bonds. Convertible bonds have both fixed income and equity characteristics.

Fixed Income: Diversified funds may invest in a variety of fixed income strategies. While many invest in multiple strategies, others may focus on a single strategy less followed by most fixed income hedge funds.

Fixed Income: High-Yield managers invest in non-investment grade debt. Objectives may range from high current income to acquisition of undervalued instruments. Emphasis is placed on assessing credit risk of the issuer.

Fixed Income: Mortgage-Backed funds invest in mortgage-backed securities. Many funds focus solely on AAA-rated bonds. Macro involves investing by making leveraged bets on anticipated price movements of stock markets, interest rates, foreign exchange and physical commodities.

Market Timing involves allocating assets among investments by switching into investments that appear to be beginning an uptrend, and switching out of investments that appear to be starting a downtrend.

Merger Arbitrage, sometimes called Risk Arbitrage, involves investment in event-driven situations such as leveraged buy-outs, mergers and hostile takeovers.

Regulation D managers invest in Regulation D securities, sometimes referred to as structured discount convertibles. The securities are privately offered to the investment manager by companies in need of timely financing and the terms are negotiated.

Relative Value Arbitrage attempts to take advantage of relative pricing discrepancies between instruments including equities, debt, options and futures. Managers may use mathematical, fundamental, or technical analysis to determine misvaluations.

Sector (Total) includes funds that concentrate their investments in the following sectors: Energy, Financial, Healthcare/Biotechnology, Real Estate, Technology, and Miscellaneous.

Short Selling involves the sale of a security not owned by the seller; a technique used to take advantage of an anticipated price decline.

Fund of Funds invest with multiple managers through funds or managed accounts. The strategy designs a diversified portfolio of managers with the objective of significantly lowering the risk (volatility) of investing with an individual manager.

*Hedge Fund Research