---
title: "Hedge Fund Strategy Classification Reference"
description: "Reference table classifying hedge fund strategies by type, typical leverage, return target, and market correlation, from long-short equity to global macro."
canonical: https://www.getswoopr.com/tables/alternatives/hedge-fund-strategy-classification/
source: "Swoopr Investment: https://www.getswoopr.com"
---

## Direct Answer



> Hedge funds use roughly 7 main strategy families. Long-short equity is the most common, targeting 6-10% annual returns with moderate equity correlation. Global macro has the lowest market correlation but highest dispersion. Average hedge fund net returns since 2010 have trailed a simple 60/40 portfolio after fees.







# Hedge Fund Strategy Classification Reference



By [Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/) · Published September 17, 2026 · *AI-assisted research, editorially reviewed.*





## Hedge Fund Strategy Classification



| Strategy | Description | Typical Leverage | Return Target (net) | Correlation to S&P 500 | Fee Structure |
| --- | --- | --- | --- | --- | --- |
| Long-Short Equity | Buy longs, short overvalued stocks | 1.5x-3x | 8-12% | 0.5-0.7 | 1.5/15-2/20 |
| Market Neutral | Equal dollar long/short | 2x-5x | 4-7% | 0.0-0.2 | 1/10 |
| Event-Driven | M&A, spin-offs, restructurings | 1x-2x | 7-10% | 0.4-0.6 | 1.5/15 |
| Global Macro | Top-down currency, rates, commodities | 2x-10x | 10-15% | 0.0-0.3 | 2/20 |
| Fixed Income Arb | Exploit rate spread mispricings | 5x-15x | 4-8% | 0.1-0.3 | 1.5/15 |
| Quantitative/CTA | Systematic, trend-following | 3x-8x | 8-14% | -0.1-0.2 | 2/20 |
| Multi-Strategy | Multiple concurrent strategies | 2x-6x | 8-12% | 0.3-0.5 | 2/20 |



Source: [HFR (Hedge Fund Research)](https://www.hedgefundresearch.com/), [Preqin](https://www.preqin.com/) global hedge fund database. Last verified: September 2026.







## Frequently Asked Questions


### What is a hedge fund?

A hedge fund is a private investment partnership that uses diverse and often complex strategies unavailable to traditional mutual funds, including short selling, leverage, derivatives, and concentrated bets. They are typically limited to accredited or qualified investors due to reduced regulatory oversight.


### What fees do hedge funds charge?

Most hedge funds charge a management fee (typically 1.5-2% of assets annually) plus a performance fee (typically 15-20% of profits). This "2 and 20" structure has moderated to roughly "1.5 and 17" industry-wide as institutional investors demanded fee concessions after years of underperformance versus passive alternatives.


### Do hedge funds outperform the stock market?

Aggregate hedge fund performance has underperformed a simple S&P 500 index fund in most years since 2010 after fees. Warren Buffett's famous 10-year bet (2008-2017) saw a low-cost S&P 500 index fund return 7.1% annually vs. 2.2% for a fund-of-funds portfolio. However, some strategies (global macro, managed futures) offer genuine diversification value that return comparisons to equities do not capture.







## Cite This Page



If you reference this table in your own work, use the following citation format and add the date you accessed it:



> Swoopr Editorial Team. (2026). *Hedge Fund Strategy Classification Reference*. Swoopr Investment. [https://www.getswoopr.com/tables/alternatives/hedge-fund-strategy-classification/](https://www.getswoopr.com/tables/alternatives/hedge-fund-strategy-classification/)



Check the figures against the primary sources listed under References before you rely on or republish them; the series they come from are revised.







## References



- [HFR Hedge Fund Research: Industry Data](https://www.hedgefundresearch.com/)
- [Preqin: Global Alternatives Data](https://www.preqin.com/)
- [Morningstar: Hedge Fund Research](https://www.morningstar.com/)