- Relative value strategies benefit from market arbitrage. In case of fixed income arbitrage (interest arbitrage) the hedge fund speculates with and attempts to exploit price inefficiencies on the fixed-income, futures and derivatives markets for bonds. Such funds will customarily purchase an undervalued security (long position) and simultaneously sell a synthetic version of the instrument. Since price inefficiencies are generally not very large, borrowed funds are used extensively in order to increase the share of third-party funds (leverage), thereby raising the return on equity.

- Managers of event-driven hedge funds target specific events in a company's life cycle, such a takeovers, mergers or reorganizations not yet anticipated by the market. Here, investment performance depends not on overall market developments but on the manager's ability to analyze and exploit event-driven situations.

- Global macro-strategies attempt to profit from worldwide developments on the equity, foreign exchange, interest, commodity and other markets, usually based on a macroeconomic analysis. They try to predict and anticipate changing trends on the markets.

- Long/short strategies (equity hedged) were the original basis for the development of hedge funds. Shares classified as undervalued are bought and overvalued shares sold short at the same time. With this approach, a positive return can be achieved both in rising and falling markets. The focus is not on expected movements in the overall stock market, but rather the assessment of individual shares and their relationship to one another.

- Managed futures strategies involve professional, active and often global portfolio management of various asset classes using exchange-traded futures and derivates on financial assets and commodities. The idea is that price movements follow certain, analytically predictable trends. Hedge funds offer good chances of achieving high returns, but also entail equally high risks of incurring substantial losses.