Several hedge funds are entrepreneurial organizations that use proprietary or well-guarded strategies. When the hedge fund universe is wide and frequently funds can fit into multiple categories, funds are usually classified as either equity-focused or fixed-income. Past this very fundamental definition, funds can be split down into any number of sub-categories, depending upon their investment strategies. Some general fund types include:
1. Long-Short Funds: Take both short and long positions in securities in hopes of using superior stock picking strategies to outperform the general market.
2. Market-Neutral Funds: A sub-type of a long-short fund, though fund managers attempt to hedge against general market movements (so the name "market neutral").
3. Event-Driven Funds: An effort to capture gains from market events, like mergers, natural disasters or political turmoil.
4. Macro Funds: Take directional bets on the market like a whole, either long or short, based on research and/or the fund''s philosophy.