What is a long-short mutual fund?
What is a long-short mutual fund?
A long-short fund is a mutual fund that holds investments long and in addition it sells securities it does not own (short). The goal of a long-short fund is to find investments anticipated to go up, and find investments anticipated to go down, and invest in both in an attempt to increase returns.
Are long/short funds risky?
For example, long/short equity funds averaged a 1.9% expense ratio, compared to a . 57% expense ratio average across all mutual funds, according to 2016 data from Morningstar. In addition, the funds make use of more complex investment strategies and can be considered riskier than traditional mutual funds.
Can mutual funds short stocks?
No Securities and Exchange Commission regulation prohibits fund managers from shorting stocks.
What is long fund?
A long/short fund is a type of mutual fund or hedge fund that takes both long and short positions in investments typically from a specific market segment. Long/short funds may also be referred to as enhanced funds or 130/30 funds.
Why hedge funds are highly attractive?
The most important feature of hedge funds is that they seek to deliver absolute, rather than benchmarked returns. However, hedge funds managers do not have any such luxuries. Since they are not regulated, most countries do not allow them to raise money from the general public through a prospectus or advertisements.
What are ultra short term mutual funds?
Ultra short-term funds are mutual fund schemes that aim to provide investors an opportunity to earn returns by investing in money market securities. There is a large institutional market where money is borrowed and lent for periods as short as one day, 14 days, a month and 3 months.
Do mutual funds offer guaranteed returns?
No, the returns on Mutual Funds are not guaranteed. No single fund or fund manager can make any form claims regarding the return of a particular. The selection of a fund is based on historical returns, its past performance and the sectors and areas in which it plans to invest.
What are the returns on mutual funds?
A mutual fund return is like any other investment return and money can be made from it in three ways: Via dividends on stocks and interest on bonds. If the fund sells the securities that have appreciated in value, then there is a capital gain which is distributed on to the unit holders.
What is a long short equity fund?
Long short equity is an investment strategy used primarily by hedge fund managers, who are money managers who make trading decisions in a portfolio. It is a common strategy among this group, and it is driven by betting on a stock’s direction. The long part of the equation is a bet that a stock investment will rise in value.
