Merger Arbitrage:
Merger arbitrage is designed to profit from the successful completion of
announced merger and acquisition (“M&A”) transactions involving
publicly owned companies.Typically, long stock positions are taken in companies
that are takeover targets, and short positions are implemented in companies
doing the acquisitions.
Example: Company A intends to takeover Company B.The Manager would
purchase shares in Company B, and short sell shares in Company A.
Convertible
Arbitrage: This strategy attempts to exploit periodic securities mispricings
by purchasing convertible debt securities of corporations while simultaneously
hedging the underlying risk of the share price by shorting the stock against
the value of the debt securities.
Example: The Manager tries to aim for a buyers market for convertible
shares from Company A and a seller’s market for regular shares from
the same Company.The Manager’s position should generate profits from
fixed income securities and short-sold shares, while protecting the capital
from market fluctuations.
Tactical Market Timing: An equity-timing and asset allocation strategy
developed by Norshield Asset Management for the U.S. equity markets. Its
objective is to shift exposure between large-cap indices, small-cap indices
and cash.
Managed Futures: A two-tiered trading strategy.The first tier combines
short-term pattern recognition with a longterm trend-following approach.The
second tier employs a fully systematic and automated trend-following approach,
which tracks and trades futures contracts on over 60 markets worldwide.
Bond Fund Timing: A fixed-income mutual fund timing strategy that
relies on a number of external fundamental and economic variables. The investment
portfolio is exchanged between aggressive (typically
high-yield bond funds) and defensive (money market funds) mutual funds within
the same mutual fund family at the discretion of the Manager.
Multi Strategy: Managers diversify their investment approach by using
various arbitrage strategies simultaneously to realize long- and short-term
gains.This allows managers to overweight or underweight different strategies
to best capitalize on current investment opportunities.
Statistical Arbitrage: This strategy profits from pricing inefficiencies
that are identified through the use of sophisticated quantitative models.
Statistical arbitrage attempts to profit from the likelihood that prices
will trend toward a historical norm while neutralizing the portfolio to exposure
in a number of external factors (e.g. market exposure, sector exposure, market
cap exposure).
Equity Long/Short:
This hedge strategy involves equity-oriented investing on both the long and
short sides of the market.The objective is not to be market neutral.Managers
have the ability to shift from value to growth, from small to medium to large
capitalization stocks, and from a net long position to a net short position.
Example: The Manager believes share A is undervalued and share B is
overvalued.The Manager takes a long position in share A for it’s high
return potential, and short sells share B to make a profit on the expected
decrease in value.
Equity Market Neutral: Managers using this strategy create a portfolio
with long positions in undervalued
securities and short positions in stocks they perceive to be overvalued.This
concentrates the results on relative values and mitigates the dependence
of portfolio performance on general market direction.
Example: The Manager buys a portfolio, which contains a basket of
undervalued Canadian shares that represent a cross-section of Canadian industries.The
Manager then short sells a portfolio of similar shares from similar industries
represented in portfolio A that are judged to be overvalued.The combination
of these two portfolios eliminates the market exposure and generates additional
returns.
