The case for long/short equity strategies (Dec 21, 2009) Christopher McHugh Jason Schrotberger, CFA Frank Sustersic, CFA Robert Turner, CFA David Honold Vijay Shankaran, MD, PhD Matt Glaser Our position in brief We think long/short equity strategies should be an integral part of institutional and individual investors’ diversified portfolios for two reasons. One, long/short equity strategies can produce equity-like returns over time, with a lower level of volatility than that of long-only funds and the stock market. Two, they can provide diversification and deliver downside protection to bolster investors’ resolve to stay invested in stocks throughout a full market cycle. Large institutions have the ability to gain exposure to long/short strategies through separately managed accounts, which often provide structural advantages. Smaller institutions have mainly used limited partnerships to gain access to long/short investments. As more investment managers offer long/short mutual funds, we believe that all types of investors (including small institutions) will have the ability to benefit from the various advantages offered by long/short equity strategies. Please click here for full position paper.

Send This Page To A Friend

Subscribe to Commentary