However, it can invest in equity and debt instruments as well as arbitrage opportunities using hedging positions. Whereas, the equity component offers growth and appreciation of capital, the upside can be constrained but resultantly, risk is also limited due to the inbuilt arbitrage component.
The arbitrage portion of these funds allows the biggest advantage as far as stable returns are concerned.
Essentially, it seeks to capitalize on pricing inefficiencies in the equities market's cash and derivative components. As a result, the fund's overall stock exposure is partially hedged, lowering volatility as compared to an aggressive hybrid fund with wholly unhedged equity exposure.
Esta historia es de la edición September 16, 2024 de The Morning Standard.
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Esta historia es de la edición September 16, 2024 de The Morning Standard.
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