These single strategy “baskets” are individually investable building blocks offered in managed accounts reflecting the nine strategies both in composition and proportion. The daily values of the individual baskets will be available through PlusFunds to investors, according to a news release.
The S&P Hedge Fund Investment Baskets include:
- Fixed Income Arbitrage – capitalizes on pricing discrepancies in fixed income instruments by taking arbitrage positions between similar bonds, possibly at different points along the yield curve.
- Convertible Arbitrage – seeks to exploit anomalies in prices between convertible securities and common stock of the same company.
- Equity Market Neutral – seeks to create a portfolio with little or no directional exposure to the market by taking long and short positions that are neutral to the overall equity market.
- Macro – uses political/economic and quantitative analysis to capitalize on various investment opportunities.
- Managed Futures – investments in commodity futures, financial futures, and currencies.
- Long/Short Equity – invests in both long and short positions in equities to benefit from market movements in both directions.
- Special Situations – capitalizes on special events such as spinoffs, corporate reorganizations and restructuring.
- Distressed – invests in debt or equity of companies that are facing financial distress.
- Merger Arbitrage– seeks to exploit the price disparity from merging companies, typically by taking a long position in the target company and a short position in the acquirer.