The fund:

Manager:

The call:

Highlights of the call:

In December 2012, we spoke with Matt and Dan about the River Road Long Short Strategy, which is also used in this fund. With regard to the strategy, they noted:

• they believe they can outperform the stock market by 200 bps/year over a full market cycle. 
• they believe they can keep beta at 0.3 to 0.5. They have a discipline for reducing market exposure when their long portfolio exceeds 80% of fair value. 
• risk management is more important than return management, so all three of their disciplines are risk-tuned. 
• River Road is committed to keeping the strategy open for at least 8 years.
• The fund might be considered an equity substitute. Their research suggests that a 30/30/40 allocation (long, long/short, bonds) has much higher alpha than a 60/40 portfolio.

The conference call (When you click on the link, the file will load in your browser and will begin playing after it’s partially loaded.)

The profile:

Long/short investing makes great sense in theory but, far too often, it’s dreadful in practice.  After a year, ARLSX seems to be getting it right and its managers have a pretty cogent explanation for why that will continue to be the case.

The Mutual Fund Observer profile of ARLSX, dated June 2012.

The ARLSX audio profile

Web:

For information about the Aston mutual fund, subadvised by River Road, please see the following:

Aston Asset Management

2013 Q3 Report

Fact Sheet

ARLSX Profile Sheet

Fund Focus: Resources from other trusted sources