Equity hedge is characterized by investment managers investing in domestic and international equity markets with a strong commitment to running portfolios on a highly-hedged basis.

Portfolios may be run with a purely balanced exposure or within tight bands of net exposure.

Returns can be driven by fundamental or quantitative security selection, both within sectors or across sectors, but without a significant beta exposure in the portfolio.

Due to the leverage involved, a relatively small movement in the market price of the traded instruments may result in a disproportionately large profit or loss.