Daily Archives: Jan 6, 2017 at 09:53 am EDT

Do Long-Short Equity Mutual Funds Pass The Smell Test?

Around the turn of the century, the first wave of mutual funds trying to replicate hedge fund strategies started rolling off the financial industry’s assembly line. With more than a decade of results in hand, we can begin to assess how this experiment in publicly traded funds has fared. As you might expect, the results are mixed. But that tends to be true for active management generally. Let’s dig a bit deeper and focus on so-called alternative investing categories for mutual funds, as defined by Morningstar, starting with long-short equity strategies. In follow-up pieces, I’ll look at other alternative categories.
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