With over 30 years collective experience, our investment teams have garnered strong expertise in trading, investing and risk management. This experience is coupled with long-standing relationships in the hedge fund industry and an investment philosophy based on measuring, monitoring and managing risk.
US$7.2 bn
Hedged strategies assets under management
30+
Years investing in hedged strategies
35+
Investment professionals
Data as of 30/06/2025.
The term hedged strategies describe a rank of investing approaches with various trading techniques across different asset classes. Given this range it is particularly important to understand characteristics of different strategies. This understanding will help allocate investors to strategies that are more likely to contribute to the desired outcome.
Seeks to produce returns from investments in the global equity markets by making long and short investments.
Key characteristics:
Wide range of investment techniques that seek to profit from pricing inefficiencies.
Key characteristics:
Generally, invests in securities of companies undergoing corporate events.
Key characteristics:
Focuses on top-down, macroeconomic opportunities
Key characteristics:
Hedged strategies represent a diverse group of strategies that may serve multiple roles. This has historically made hedged strategies a popular diversification and outcome investing tool for institutional investors.
Investing in hedged strategies offers the potential to reduce downside risk while seeking positive returns. These strategies can provide flexibility to adapt to changing market conditions, enhancing portfolio stability and risk-adjusted returns, particularly in uncertain environments.
1 January 2014 - 31 December 2024
| 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|---|---|---|---|
Relative Value -0.29% | Event-Driven 10.57% | Global Stocks 23.07% | Relative Value -0.43% | Global Stocks 28.40% | Equity Long/Short 17.89% | Global Stocks 22.35% | Global Macro 8.98% | Global Stocks 24.42% | Global Stocks 19.19% |
Global Stocks -0.32% | Global Stocks 8.15% | Equity Long/Short 13.29% | Global Bonds -1.20% | Equity Long/Short 13.71% | Global Stocks 16.50% | Event-Driven 12.41% | Relative Value -0.68% | Equity Long/Short 11.37% | Equity Long/Short 11.97% |
Equity Long/Short -0.97% | Relative Value 7.67% | HFRI Composite 8.59% | Event-Driven -2.13% | HFRI Composite 10.45% | HFRI Composite 11.83% | Equity Long/Short 11.67% | HFRI Composite -4.14% | Event-Driven 10.42% | HFRI Composite 9.83% |
HFRI Composite -1.12% | Equity Long/Short 5.47% | Event-Driven 7.59% | Global Macro -4.08% | Event-Driven 7.49% | Event-Driven 9.26% | HFRI Composite 10.16% | Event-Driven -4.83% | HFRI Composite 8.12% | Event-Driven 9.27% |
Global Macro -1.26% | HFRI Composite 5.44% | Global Bonds 7.39% | HFRI Composite -4.75% | Relative Value 7.42% | Global Bonds 9.20% | Global Macro 7.72% | Equity Long/Short -10.13% | Relative Value 6.95% | Relative Value 8.72% |
Global Bonds -3.15% | Global Bonds 2.09% | Relative Value 5.14% | Equity Long/Short -7.14% | Global Bonds 6.84% | Global Macro 5.38% | Relative Value 7.59% | Global Bonds -16.25% | Global Bonds 5.72% | Global Macro 5.65% |
Event-Driven -3.55% | Global Macro 1.03% | Global Macro 2.20% | Global Stocks -8.20% | Global Macro 6.50% | Relative Value 3.38% | Global Bonds -4.71% | Global Stocks -17.73% | Global Macro -0.34% | Global Bonds -1.69% |
For illustration purposes only, highlighting the performance variation between hedge fund strategies and markets over time. Source: Franklin Templeton Capital Markets Insights Group, MSCI, Bloomberg, HFRI. Equity Hedge is represented by HFRI Equity Hedge (Total); Event Driven is represented by HFRI Event Driven (Total); Global Macro is represented by HFRI Macro (Total); Hedge Strategy Composite is represented by HFRI Fund Weighted Composite; Relative Values is represented by HFRI Relative Value (Total). Important data provider notices and terms available at www.franklintempletondatasources.com. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. Unlike most asset class indexes, HFR Index returns reflect fees and expenses.
Long-short strategies involve taking long positions in companies expected to rise and short positions in companies expected to fall. They attempt to make money by employing either fundamental or quantitative analysis.
Activist investors are often taking large positions and board seats to unlock value in companies. Activism can result in restructuring or selling off unproductive assets. Merger-arbitrage seeks to take advantage of merger activity typically taking positions in potential targets before the market has priced in a transaction.
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The Franklin Templeton knowledge hub provides educational resources to help empower partners to navigate alternative investments. Explore our knowledge hub section to find out more about our experts’ latest thinking, unique opportunities, and an in-depth understanding of the alternatives market.
The first in our ‘Accessing Private Assets’ series aimed at providing transparency on private asset products, we explore how managers support the periodic liquidity (subscriptions and redemptions) available to investors in semi-liquid fund structures.
Private markets have historically delivered an “illiquidity premium” which has been captured by many institutions in their asset allocation to alternatives. Learn more about the illiquidity premium and get some ideas about allocating to private markets.
The global secondary market has grown over the past three decades primarily because of the increased supply of capital committed to private investment funds, according to Lexington Partners. They believe the backdrop for the secondary market continues to remain attractive.
Investment risks
Hedged strategy investments can be complex and require a thorough understanding of the underlying instruments and strategies.
Important information
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