Thus, the fund manager will purchase the stocks they feel are undervalued and Sell those who are overvalued. § 53b KWG). The AIP Hedge Fund Solutions Team provides its view on recent performance of the hedge fund industry and its outlook for hedge fund strategies going forward. Registered No. Information regarding expected market returns and market outlooks is based on the research, analysis and opinions of the authors. Hong Kong: This document has been issued by Morgan Stanley Asia Limited for use in Hong Kong and shall only be made available to “professional investors” as defined under the Securities and Futures Ordinance of Hong Kong (Cap 571). A third hedging strategy is to based long/short positions on overall market conditions. Germany: Morgan Stanley Investment Management Limited Niederlassung Deutschland Junghofstrasse 13-15 60311 Frankfurt Deutschland (Gattung: Zweigniederlassung (FDI) gem. This publication, and any access to it, is intended only for “wholesale clients” within the meaning of the Australian Corporations Act. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the portfolio will decline and that the value of portfolio shares may therefore be less than what you paid for them. Registered with the Register of Commerce Zurich CHE-115.415.770. Alternative Risk Premia: Seeing the Whole Picture. This communication is not a product of Morgan Stanley’s Research Department and should not be regarded as a research recommendation. The client shall delegate to MSIMJ the authorities necessary for making investment. However, we have not verified this information, and we make no representations whatsoever as to its accuracy or completeness.

Additionally, financial intermediaries are required to satisfy themselves that the information in this document is suitable for any person to whom they provide this document in view of that person’s circumstances and purpose. Indirect charges also may be incurred, such as brokerage commissions for incorporated securities. A comprehensive assessment of noteworthy trends shaping the global investment risk environment and our portfolio allocations. The option-based strategy seeks to provide a unique mix of downside protection and equity … In this type of Hedge Fund Strategy, the Investment manager maintains long and short positions in equity and equity derivatives. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice.

Telephone: 31 2-0462-1300. The Hedged Equity Strategy draws upon nearly a decade of Calamos experience in hedging options and two decades in equity investing. Net market exposure: Takes into account the benefits of offsetting long and short positions; is calculated by subtracting the percentage of the fund’s equity capital invested in short sales from the percentage of equity capital used for long positions. in advance. Please consider the investment objectives and nature of risks before investing. As an investment advisory fee for an IAA or an IMA, the amount of assets subject to the contract multiplied by a certain rate (the upper limit is 2.16% per annum (including tax)) shall be incurred in proportion to the contract period. MSIMJ exercises the delegated authorities based on investment decisions of MSIMJ, and the client shall not make individual instructions. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without MSIM Ireland’s express written consent. MSCI World Index Net (USD): A market cap weighted stock market index that represents large and mid-cap equity performance across 23 developed markets countries with net dividends reinvested in US dollars. Authorised and regulated by Central Bank of Ireland. Hedge fund co-investments have an important role to play in client portfolios, explains AIP Hedge Fund Solutions Team Managing Director Jarrod Quigley. If one asset collapses, you don't lose everything. COVID-19 leaves investors in uncharted waters. If there are any discrepancies between the English version and any version of this document in another language, the English version shall prevail.

Morgan Stanley Investment Management is a branch office of Morgan Stanley Investment Management Limited. There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. A wide variety of techniques are employed to arrive at an investment decision. Any performance quoted represents past performance.

For those who are not professional investors, this document is provided in relation to Morgan Stanley Investment Management (Japan) Co., Ltd. (“MSIMJ”)’s business with respect to discretionary investment management agreements (“IMA”) and investment advisory agreements (“IAA”). The information herein does not address financial objectives, situation or specific needs of individual investors. Since these charges and expenses are different depending on a contract and other factors, MSIMJ cannot present the rates, upper limits, etc. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto. Morgan Stanley Investment Management Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. Launched by Alfred W. Jones in 1949, this strategy is still in use on the lion’s share of equity hedge fund assets today. In our view, the most compelling strategy in today’s market environment would be a low-net or zero-net strategy, otherwise known as “market neutral.” Compared to other long-short equity strategies, market neutral strategies tend to exhibit low or zero beta, lower market risk, lower market volatility and seek to generate returns through stock selection. MSIM Ireland has not authorised financial intermediaries to use and to distribute this document, unless such use and distribution is made in accordance with applicable law and regulation. Telephone: +97 (0)14 709 7158). Accordingly, save where an exemption is available under the relevant law, this document shall not be issued, circulated, distributed, directed at, or made available to, the public in Hong Kong.

Equity Market Neutral Strategies typically maintain characteristic net equity market exposure no greater than 10% long or short. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index.

This material is a general communication, which is not impartial and has been prepared solely for informational and educational purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. Managers of market-neutral strategies can take a variety of steps to reduce risk and protect capital, specifically: Long-Short Strategies Have Held Their Own In Prior Market Downturns.

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  An option is the … The first hedge fund used a long/short equity strategy. for spotting hot growth stories. In-depth insights on emerging and global Certain statements herein are based upon the views and opinions of or data obtained from one or more third parties. Member FINRA/SIPC. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. Amid the market uncertainty caused by the COVID-19 pandemic, investors may be seeking ways to add resilience to their portfolios. These strategies are not designed to shoot the lights out, but they have the potential to provide steady gains even in down markets. When included as part of a broadly diversified portfolio, such strategies have the potential to: (1) generate profits from their long and short positions and (2) provide an element of protection, or hedge, when markets decline because gains on short positions will dampen losses on long positions. MSIM Ireland shall not be liable for, and accepts no liability for, the use or misuse of this document by any such financial intermediary. HFRI Equity Hedge (Total) Index: Investment Managers who maintain positions both long and short in primarily equity and equity derivative securities. Subscriptions    •    Privacy & Cookies    •    Terms of Use. Any charts and graphs provided are for illustrative purposes only. A minimum asset level is required. A wide variety of investment processes can be employed to arrive at an investment decision, including both quantitative and fundamental techniques; strategies can be broadly diversified or narrowly focused on specific sectors and can range broadly in terms of levels of net exposure, leverage employed, holding period, concentrations of market capitalizations and valuation ranges of typical portfolios.

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