Making an Investment in Market-Neutral Strategies    3

Linear Analysis of Returns

Reducing Exposure to Risk

Market-Neutral and Hedged Strategies

Convertible Arbitrage

Fixed-Income Arbitrage

Mortgage-Backed Securities Arbitrage

Merger Arbitrage

Equity Hedge

Equity Market Neutral and Statistical Arbitrage

Relative Value Arbitrage

Achieving Superior Risk-Adjusted Returns

Assessing the Risks

Transparency

Focusing on the Underlying Strategies

Market-neutral strategies offer competitive returns with lower volatility than traditional long-only investments in equities and bonds. In addition, as a group they have low correlation to traditional investments in stocks and bonds. Both of these characteristics allow investors to improve risk-adjusted returns ...

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