Hedge funds consist of equities, bonds, commodities or cash but they also often use instruments that have a leveraging effect (options, ‘financial futures’, etc.), with the aim of increasing the future performance of their strategy.

Hedge funds aim to reduce volatility and risk, while preserving capital and delivering positive returns under all market conditions. The fund managers therefore take both long and short positions, use arbitrage, buy and sell undervalued securities, trade options or bonds, and invest in almost any opportunity in any market where they foresee gains at reduced risk.

Return, volatility, and risk vary considerably among the different hedge funds.
A fund of funds, on the other hand, combines various strategies and asset classes to create more long-term stability. Investing in a fund of hedge funds can be an option to compensate for the lack of liquidity and transparency of an individual hedge fund. It also enables investors to by-pass restrictions regarding very high minimum investments.

Fortis Private Banking only invests in funds of funds to benefit from low correlation with other asset classes and to limit risk.