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Most have struggled this year, as the article mentions...one of my favorites WBMIX is off 3.5% YTD. Honestly, hard to beat the pure index in this market.
I don't think the article mentioned a different kind of long/short strategy that is doing well lately...Gotham Absolute Return Fund (GARIX)...up 9% YTD, or Gotham Enhanced Return Fund (GENIX)...up 16.7% YTD. I'm actually reluctant to call attention to Gotham's Funds, despite my admiration for Mr. Greenblatt...hard for me to get past the 2.25% er. But, in this case, so far anyway, must give these funds credit.
GENIX has been open less than 2 years (since May 31, 2013). Classic pattern for many of these boutique funds with high fees. Tailor a hot combination of investments (in this case 99.5% equities) and ride the wave. Watch the money pour in (already over 1.5 BL). Pump that new money into the currently hot sectors. A year (or two or three) later, the market climate changes and the fund starts to swoon. The money pours out as fast as it came in and everybody is convinced the fund's losses are attributable to "bloat" (missing the larger issue).
As usual, those who were last in and last to leave suffer the losses. Seen this over and over with these funds.
I don't think the article mentioned a different kind of long/short strategy that is doing well lately...Gotham Absolute Return Fund (GARIX)...up 9% YTD ....
I've not generally been too wild about long-short equity, but I can see there could be some promise in a "sprawling quant" strategy like J. Greenblatt's: quant factors can give a small edge, and the huge number of stocks in the portfolio allows that edge to be the primary driver of results ... evening out the effects of any bad data or crummy management here and there.
But for a strategy like that to be a real diversifier, it seems to moi that it needs to come in an equity-market-neutral package. There is at least one of those now: AQR's new QMNNX. I've put in a very small test position to give it a try.
Comments
I don't think the article mentioned a different kind of long/short strategy that is doing well lately...Gotham Absolute Return Fund (GARIX)...up 9% YTD, or Gotham Enhanced Return Fund (GENIX)...up 16.7% YTD. I'm actually reluctant to call attention to Gotham's Funds, despite my admiration for Mr. Greenblatt...hard for me to get past the 2.25% er. But, in this case, so far anyway, must give these funds credit.
As usual, those who were last in and last to leave suffer the losses.
Seen this over and over with these funds.
But for a strategy like that to be a real diversifier, it seems to moi that it needs to come in an equity-market-neutral package. There is at least one of those now: AQR's new QMNNX. I've put in a very small test position to give it a try.
Best, AJ