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Investment Strategy

Long position A long position entails the purchase and holding of securities by the fund with the intention of selling these for a higher price in anticipation of rising prices.
Short sell With short selling, the fund manger sells equities that the fund does not own in the hope of being able to buy the shares at a later date for a lower price, thereby profiting from the decline in price. In this context, it is possible to distinguish between secured and unsecured short selling. Secured short selling requires the seller to borrow the equities in advance. Unsecured short selling is currently prohibited on the SIX Swiss Exchange and on many other exchanges.
Total return funds Total return funds, also sometimes called absolute return funds or super funds, have the objective of achieving a positive return year on year, irrespective of market performance. This represents a departure from the normal benchmark approach, which measures the performance of a fund against a benchmark, i.e. whether the fund's performance is better or worse than that of the index.
To achieve the objective of a sustained positive return, the fund managers of total return funds create a portfolio mix of equities, bonds, derivatives and options. Depending on market developments, the focus can be on relatively conservative bonds and money market investments or on speculative investment types. The interest income from bonds serves as a risk buffer.
Many fund managers also use short selling. When prices are weak, they sell equities that they do not own but which they have only borrowed in order to buy them back at a lower price. The name "total return" often covers a range of investment approaches. The investment horizon for absolute return funds is long term. The hedging instruments used are expensive and the higher costs are only offset after a number of years.
Hedge funds Hedge funds are characterised by a speculative investment strategy that has a high degree of risk but which can also generate higher returns. Hedge funds typically invest in derivatives and also make use of short selling. This gives the fund type its name because, in addition to speculation, these instruments can also be used for hedging.
Hedge funds are subject to very minimal legal restrictions. The objective is to increase the capital as much and as fast as possible.
Value strategy This investment strategy focuses on buying the shares of companies which offer above-average value relative to the current share price - in the form of higher equity capital, good management structures etc. The concept behind this approach is that the market will reflect this value and the shares will be bought. This will result in prices rising.
Growth strategy This strategy invests in shares of fast-growing companies; these are often young companies and companies working with new technologies.