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Fixed income strategies are based on public and private debt instruments with fixed rates and maturities and their derivatives. These strategies include long and short arbitrage.

A fund of funds strategy allocates assets among several funds usually using different strategies in order to achieve diversification. Investors have access to managers through smaller investment minimums than if they went to each manager directly. Investors are charged a fee of 1 to 3 percent on top of fees for the underlying funds.

Global emerging funds are those that invest in emerging markets such as those of Russia, China, India, and Latin America. The funds are usually either equity or fixed income oriented. Because many emerging markets do not allow short selling or offer futures or derivatives to hedge with, emerging markets often use long-only strategies. Those funds that had exposure to Russia in 1998 tended to be the worst performers. In 1999, they tended to be the best performers.

Global established funds focus on opportunities in established markets such as Japan, the United States, or Europe. One example is Maverick Capital.

Global macro managers trade opportunistically around the globe, using stocks, bonds, currencies, and other instruments and vehicles. Their positions reflect their views on overall market direction as influenced by major economic trends. They include Julian Robertson's Tiger Management and George Soros's Quantum funds.

Long/short equities are also referred to as the Jones model. The objective is not to be market neutral but rather directional. Managers shift from value to growth, from small to medium to large cap, from a net long position to a net short.

Managed futures managers invest in financial, commodity, and currency markets. Managers are either systematic (i.e., trading is based on price and market specifics) or discretionary (i.e., trading is based on judgment). John W. Henry & Co. is an example of a systematic managed futures manager.

Market neutral managers attempt to make 1 to 1.5 percent return per month as they lock out or neutralize market risk. This is accomplished by using a long/short strategy, convertible arbitrage, statistical arbitrage, and merger arbitrage. Market neutral is perceived as a conservative strategy. Industry, sector, and market capitalization are some of the exposures that managers try to control. Leverage may be used to en-