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    Hedge Fund Strategy Definitions

Disclaimer: Tuna Indices are an unweighted average of all fund returns as reported by the managers within each particular strategy. They are not dollar weighted and generally can be subjected to inaccuracies in the early part of each month due to the timeliness of manager reporting. The YTD figures by strategy provide may vary year to year based on market conditions.
Capital Structure Arbitrage - YTD 17.81%
A relative value fund that attempts to capture pricing inefficiencies among various tranches of debt or equity of the same or related companies.
Convertible Arbitrage - YTD 20.52%
Manager focuses on obtaining returns with low or no correlation to the market. Manager buys different securities of the same issuer (e.g., the common stock and convertibles) and "works the spread" between them. For example, within the same company the manager buys one form of security that he believes is undervalued and sells short another security of the same company.
Country Specific - YTD 17.63%
Manager focuses on a single country, or a few countries from a specific region. Russia and Japan focused funds have been popular in the last few years.
CTA / Managed Futures - YTD 0.53%
CTA is short for Commodity Trading Advisor. CTA's generally trade commodity futures, options and foreign exchange and most are highly leveraged.
Distressed - YTD 14.45%
Buying the equity or debt of companies that are in or facing bankruptcy. Manager hopes to buy company securities at a low price and that company will come out of bankruptcy and securities will appreciate.
Emerging Markets - YTD 22.15%
Manager focuses on investing in the securities of companies from "emerging" or developing countries.
Energy Sector - YTD 11.83%
Manager is primarily invested in securities revolving around the energy sector.
Event Driven - YTD 15.89%
Manager takes significant position in limited number of companies with "special situations": companies' situations are unusual in a possible variety of ways and offer profit opportunities; e.g., depressed stock; event in offing offering significant potential market interest (e.g., company is being merged with or acquired by another company); reorganizations; bad news emerging which will temporarily depress stock (so manager shorts stock), etc.
Finance Sector - YTD 6.40%
Manager is primarily invested in securities revolving around the finance sector, including banks, brokerages, etc...
Fixed Income (non arbitrage) - YTD 7.80%
Manager invests in fixed income instruments, either long, short or both. Often highly leveraged.
Fixed Income Arbitrage - YTD 6.04%
Manager generally "plays the spread" between similar fixed income securities. Often highly leveraged.
Fund of funds (Single Strategy) - YTD 5.00%
Fund of funds that invest only in one type of single strategy manager. e.g. A fund of funds that invests only in Convertible Arbitrage would have Fund of funds (Single Strategy) be their primary strategy and Convertible Arbitrage as their secondary strategy.
Fund of funds (Market Neutral) - YTD 4.37%
Fund of funds that targets near zero correlation to the market or invests exclusively in market neutral or arbitrage strategies.
Fund of funds (Multi-Strategy) - YTD 3.65%
Fund of funds that invests in a basket of different strategies.
Healthcare Sector - YTD 13.65%
Manager is primarily invested in securities revolving around the healthcare sector, including biotechnology.
Long Only - YTD 20.12%
Similar to a mutual fund, except the manager can trade a variety of financial instruments and use leverage.
Long/Short Equity - YTD 10.49%
Also know as "Jones Model." Manager buys securities he believes will go up in price and sells short securities he believes will decline in price. Managers will be either "net long" or "net short" and may change their "net" position frequently. For example, a manager may be 60% long and 100% short, giving him a market exposure of 40% net short. The basic belief behind this strategy is that it will enhance the manager's stock picking ability and protect investors in all market conditions.
Macro - YTD 6.81%
The investment philosophy is based on shifts in global economies. Derivatives are often used to speculate on currency and interest rate moves.
Market Neutral Equity - YTD 2.43%
Any strategy that attempts to eliminate market risk and be profitable in any market condition.
Market Timer - YTD 12.71%
Manager attempts to "time the market" by allocating assets among investments primarily switching between mutual funds and money markets.
Mortgages - YTD 22.82%
A single strategy hedge fund that primarily invests in mortgage-backed or mortgage-related securities.
Multi-Strategy - YTD 9.34%
A single hedge fund that runs several different strategies in-house that contribute to the total performance of the fund. Multistrategy is different than a Fund of funds (Multi-Strategy) in that the money is kept in-house as opposed to being farmed out to external managers.
Options Strategies - YTD 11.79%
A loosely defined category that describes any manager that focuses on options.
Other Arbitrage - YTD -0.46%
A relative value strategy that does not fall into any of the other categories. e.g. Dividend reinvestment arbitrage.
Regulation D - YTD 13.41%
Manager will make private investments in public companies in need of financing. Generally the manager will receive a discounted convertible note in return for a capital allocation, essentially locking in a profit.
Merger / Risk Arbitrage - YTD 5.72%
Also known as "Merger Arbitrage". The manager invests in event-driven situations, such as leveraged buy-outs, mergers, and hostile takeovers. Managers purchase stock in the firm being taken over and, in some situations, sell short the stock of the acquiring company.
Short Bias - YTD -9.93%
Any manager who consistently has a "net short" exposure to the market. This category also includes short only funds.
Short-term Trading - YTD 3.93%
Manager focuses on short duration, opportunistic trades, and sometimes this strategy will include "Day Trading."
Small/Micro Cap - YTD 14.48%
Usually long biased, the manager will exclusively focus on small and micro cap stocks.
Special Situations - YTD 23.99%
"Special Situations" may broadly consist of some type of event driven strategy. Managers will opportunistically trade in any type of security that they deem to be a "special situation."
Statistical Arbitrage - YTD 12.98%
Believing that equities behave in a way that is mathematically describable, managers perform a low risk, market neutral analytical equity strategy. This approach captures momentary pricing aberrations in the stocks being monitored. The strategy's profit objective is to exploit mispricings in as risk-free manner as possible.
Technology Sector - YTD 11.77%
Manager is primarily invested in securities revolving around the technology sector such as Internet, semiconductors, hardware, software, etc...
Value - YTD 20.49%
Manager invests in stocks which are perceived to be selling at a discount to their intrinsic or potential worth; i.e., "undervalued," or stocks which are out of favor with the market and are "underfollowed" by analysts. Manager believes that the share price of these stocks will increase as "value" of company is recognized by the market.
VC / Private Equity - YTD 2.10%
Any manager who focuses on, or has a component of, venture capital or private equity.

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