Hedge Funds - a broader toolkit to capture market opportunities

Gyongyi King, Chief Investment Officer at Alexander Forbes

Flexibility gives hedge funds greater opportunism

Meeting investment objectives in the future requires greater opportunism given challenging global growth outlooks and elevated volatility we see from traditional investments.

Preparation for uncertainty means being better positioned to protect during extreme conditions. The significant market changes witnessed, in a very short space of time, are a reminder of the benefits of asset allocation and prudent portfolio construction.

Investors are increasingly exploring other strategies in previously unexploited areas of the market. Hedge funds have a role to play.

What’s special about hedge funds?

A hedge fund is an investment fund aimed at achieving an absolute performance return. Hedge funds typically have a low correlation to traditional investment types, such as equities, bonds and other money market instruments traded in public capital markets. This is made possible by the wide range of investment strategies hedge funds employ to enhance returns or reduce risk, such as those brought about by the Covid-19 pandemic.

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