With the passage of time, in the financial market, some fund organizations use financial derivatives to adopt various profit-oriented investment strategies. These fund organizations are called hedge funds. Hedge funds have long lost the connotation of risk hedging. On the contrary, it is generally believed that hedge funds are actually based on the latest investment theory and extremely complicated financial market operation skills, and make full use of the leverage of various financial derivatives to undertake high-risk and high-yield investment models.
What are the types of hedge funds?
Traditional type
This kind of fund is generally called stock selection hedge fund, which is an early hedge fund. Such hedge funds generally adopt a combination of long-term and short-term investment strategies. Fund managers will use part of their own funds to attract and invest in a number of stocks with profit prospects. At the same time, fund managers will also use the repeated fluctuations of the market to short some stocks that are bearish by the market. Of course, these stocks are either too high or their profits are regressing. In this way, when the stock market rises and falls sharply, the high-quality stocks it holds can make up for the stock investment losses that are short-sold because it is not optimistic about the market.
(2) Hedging type
Hedge hedge funds are very stable funds compared with speculation, with relatively small risks, and the annual return rate is generally maintained at around 10%-20%. The investment strategy of this kind of hedge fund is mainly to make use of the different prices of the same type of financial products between the two markets, that is, the price difference, and obtain the maximum income from the price difference by buying low and selling high. This kind of income risk is very small.
(3) speculation and speculation
Such hedge funds, also known as "smart" hedge funds, can invest and speculate in currencies, bonds, index futures, stock options and other financial derivatives. It is precisely because of its strong speculation and fierce and rapid operation that this fund has a high rate of return, but it is also risky.
(D) the risk of diversification
As the name implies, this kind of hedge fund adopts diversified investment methods, and invests its funds in different foreign exchange markets, bond markets, stock markets and futures markets, such as metals, energy, agricultural products (information forums), so as to achieve the purpose of diversifying risks, reducing risks and maximizing investment returns. The difference between it and speculation is that there are more medium and long-term investments, more dispersed investments and lower risks, with the aim of stabilizing income.
(5) comprehensive type
This kind of fund is smaller than other single hedge funds, which is more convenient for retail investors and small investors. This kind of hedge fund means that its fund managers spread their funds among hedge funds with different risks and returns.
What is the trading mode of hedge funds?
In the book Quantitative Investment-Strategy and Technology (edited by Ding Peng, Electronic Industry Press, 20121), the trading modes of hedge funds are classified into four types, namely, stock index futures hedging, commodity futures hedging, statistical hedging and option hedging.
Stock index futures
Hedging of stock index futures refers to the behavior of taking advantage of the unreasonable price of stock index futures market, participating in the trading of stock index futures and stock spot market at the same time, or trading stock index contracts with different maturities and different (but similar) categories at the same time to earn the difference. Arbitrage of stock index futures can be divided into cash hedging, intertemporal hedging, cross-market hedging and cross-variety hedging.
Commodity futures
Similar to the hedging of stock index futures, commodity futures also have hedging strategies. When buying or selling a futures contract, they sell or buy another related contract and close both contracts at a certain time. It is similar to hedging in transaction form, but hedging is to buy (or sell) physical objects in the spot market and sell (or buy) futures contracts in the futures market; Arbitrage only buys and sells contracts in the futures market, and does not involve spot trading. Commodity futures arbitrage mainly includes cash hedging, intertemporal hedging, cross-market arbitrage and cross-variety arbitrage.
Statistical hedging
Different from risk-free hedging, statistical hedging is a kind of risk arbitrage by using the historical statistical law of securities prices, and its risk lies in whether this historical statistical law will continue to exist in the future.
The main idea of statistical hedging is to find out several pairs of investment varieties (stocks or futures, etc.). ) has the best correlation, and then find out the long-term equilibrium relationship (cointegration relationship) of each pair of investment varieties. When the price difference (residual of cointegration equation) of a pair of varieties deviates to a certain extent, they start to open positions-buying relatively undervalued varieties, shorting relatively overvalued varieties, and taking profits when the price difference returns to equilibrium. The main contents of statistical hedging include stock matching transaction, stock index hedging, securities lending hedging and foreign exchange hedging transaction.
Option hedging
Option, also known as option, is a derivative financial instrument based on futures. The essence of option is to price the rights and obligations in the financial field separately, so that the transferee of the right can exercise his right to trade or not to trade within a specified time, and the obligor must perform it. When trading options, the buyer is called the buyer and the seller is called the seller. The buyer is the transferee of the right, and the seller is the obligor who must fulfill the buyer's right.
The advantages of options are unlimited income and limited risk loss. Therefore, in many cases, using options instead of futures for short-selling and hedging transactions will have less risk and higher returns than simply using futures arbitrage.
What is the difference between hedge funds?
investor
Investors in hedge funds have strict qualifications. American securities law stipulates: participate in the name of an individual, and the annual income of the individual is at least 200,000 US dollars within two years; If you participate by surname, your husband and wife have earned at least $300,000 in the last two years; In the name of the organization, the net assets are at least $6,543,800+0,000. 1996 made a new regulation: the number of participants was expanded from 100 to 500. The condition of participants is that individuals must own investment securities worth more than $5 million. Generally, there is no such restriction with funds.
operate
The operation of hedge funds is unrestricted, and there are few restrictions on investment portfolios and transactions. Major partners and managers can freely and flexibly use various investment technologies, including short selling. Trading and leverage of derivatives. The general * * * fund is more restricted in operation.
manage
Hedge funds are unregulated. The Securities Law of the United States 1933, the Securities Exchange Law of 1934 and the Investment Company Law of 1940 all stipulate that institutions with less than 100 investors need not register with the financial authorities such as the Securities and Exchange Commission of the United States when they are established, and can be exempted from regulation. Because investors are mainly a few very sophisticated and wealthy individuals, they have strong self-protection ability.
In contrast, the supervision of mutual funds is relatively strict, mainly because investors are the general public and many people lack the necessary understanding of the market. In order to avoid public risks, protect the weak and ensure social security, strict supervision is implemented.
Financing mode
Hedge funds are generally initiated through private placement, and the securities law stipulates that no media should be used to advertise when attracting customers. Investors mainly participate in four ways: according to the so-called "reliable investment news" obtained by the upper level; Know hedge fund managers directly; Transfer through other funds; Investment bank. Specially introduce securities intermediary companies or investment consulting companies. The general * * * funds mostly entertain customers through public offering and public advertising.
Offshore institution
Hedge funds usually set up offshore funds, which has the advantage of avoiding the restrictions on the number of investors and tax avoidance in American law. Usually located in tax havens such as Virginia, Bahamas, Bermuda, Cayman Islands, Dublin and Luxembourg, these places have little tax revenue.
Of the $68 billion hedge funds, $70 million is invested in offshore hedge funds. According to statistics, if "funds of funds" are not included, the assets managed by offshore funds are almost twice that of onshore funds. Ordinary * * * funds cannot be established overseas.
Therefore, ordinary funds can also hedge, but there are many restrictions.
In China, because there is no Public Offering of Fund, you can't buy and sell futures foreign exchange, so there are no financial products that can be sold short, so you can't hedge.
Domestic system
In order to classify domestic hedge funds more accurately, Shenzhen Admiralty Alpha Investment Research Co., Ltd. refers to the international well-known hedge fund classification standards, and combines the current situation and trend of domestic industry operation, and classifies them according to four different dimensions: fund strategy classification, distribution channel classification, investment variety classification and liquidation mode classification, thus forming a "hedge fund index and rating system based on hedge network strategy classification"
"Hedge fund index and rating system based on strategy classification" is mainly divided into four categories, including: strategy classification, distribution channel classification, investment variety classification and liquidation method classification; Among them, strategy classification is the core research soul of the system. According to the investment strategy of the fund, referring to the international hedge fund classification system, combined with the current situation and development trend of the industry, it can be divided into three major strategies: directional strategy, relative value strategy and event-driven strategy. Among them, the three major strategic classifications can be divided into two levels: the main strategic classification and the sub-strategic classification.