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The Long And Short Of It: Long/Short Funds Gain Traction
M* puts WhiteBox Long Short Equity in their Market Neutral. But their returns have been anything but market-neutral like. 2008 was -18%, 2009 was +54%, 2010 was -5%, 2011 was +2%, and 2012 was +4%. The outlier years are indicative to me that this funds is NOT run as a market neutral fund (one which strives to produce positive returns in most every market environment). These funds are usually very boring and bland, and we would instead consider TFS Market Neutral (TFSMX) and Eaton Vance Global Macro Absolute Return (EIGMX). EIGMX is closed, but similar-strategy EIGRX is open. It has tracked EIGMX very closely since it began in 2010.
We would put WhiteBox in the long-short group. And while it has had some great years, its performance is not as good as MFLDX, and its Sortino Ratio is much lower. We have spent some time reviewing it, expecting it to be more market-neutral than long-short, but it is not. While the fund reports show it to be net long about 20%, there is a lot going on that is not reflected in that number. So far, we have decided to not move forward with WBLFX. We already have MFLDX and EIGMX. And although MFLDX is more long-long-short than it is long-short, we are very comfortable with Michael Aronstein's management style and skills.
I agree with your categorization of Whitebox Long Short Equity WBLFX. I'll also give that Mr. Aronstein's MFLDX has (slightly) outperformed Mr. Redleaf's WBLFX since 2007. But with an enviable 13.8% APR and 2.0 Sortino Ratio since its inception in 2004, WBLFX still gets top dog honors in my book.
I did not completely follow the comparison with Eaton Vance Global Macro Absolute Return EIGMX, since it seems to be a non-traditional bond (and cash) fund. (I could not find EIGRX...did you mean EGRIX? Also, Schwab shows EIGMX open.) In any case, EIGMX looks solid...as does MFLDX. Congratulations on both those holdings.
I do not own any of these, but kind of regret not getting in when Scott was alerting us that MFLDX was closing. I think the MainStay acquisition spooked me.
I do own Mr. Redleaf's Tactical Opportunities WBMIX and continue to consider WBLFX. I also own the young ASTON/River Road Long Short ARLSX.
I know M* gives TFS Market Neutral TFSMX a gold star, but I don't see it, especially at 2.5 ER. Schwab shows it restricted anyway.
Here are lifetime stats for the funds you mentioned, plus my ARLSX:
And, M* performance chart since MFLDX's inception:
It doesn't hold too many short positions, but Litman Gregory Master Alternative Strategies MASNX is an interesting vehicle. Its only been around for a little over 1 year, so its not battle tested yet - and you have to get past the high ER. A little bit of this (merger arb) and a little bit of that (bonds), with flexibility to use leverage or go concentrated.
There is one attractive feature of MFLDX which is not often mentioned: This fund is very tax-efficient. According to M*, the tax cost ratio for the last 5 years is just 0.05, which is amazingly good. I do not know how they are doing it, but it is a big plus for those who keep it in a taxable account, and one may enjoy it as long as it lasts.
Comments
Here's ASTON/River Road Long-Short ARLSX more recently:
Got it?
We would put WhiteBox in the long-short group. And while it has had some great years, its performance is not as good as MFLDX, and its Sortino Ratio is much lower. We have spent some time reviewing it, expecting it to be more market-neutral than long-short, but it is not. While the fund reports show it to be net long about 20%, there is a lot going on that is not reflected in that number. So far, we have decided to not move forward with WBLFX. We already have MFLDX and EIGMX. And although MFLDX is more long-long-short than it is long-short, we are very comfortable with Michael Aronstein's management style and skills.
I agree with your categorization of Whitebox Long Short Equity WBLFX. I'll also give that Mr. Aronstein's MFLDX has (slightly) outperformed Mr. Redleaf's WBLFX since 2007. But with an enviable 13.8% APR and 2.0 Sortino Ratio since its inception in 2004, WBLFX still gets top dog honors in my book.
I did not completely follow the comparison with Eaton Vance Global Macro Absolute Return EIGMX, since it seems to be a non-traditional bond (and cash) fund. (I could not find EIGRX...did you mean EGRIX? Also, Schwab shows EIGMX open.) In any case, EIGMX looks solid...as does MFLDX. Congratulations on both those holdings.
I do not own any of these, but kind of regret not getting in when Scott was alerting us that MFLDX was closing. I think the MainStay acquisition spooked me.
I do own Mr. Redleaf's Tactical Opportunities WBMIX and continue to consider WBLFX. I also own the young ASTON/River Road Long Short ARLSX.
I know M* gives TFS Market Neutral TFSMX a gold star, but I don't see it, especially at 2.5 ER. Schwab shows it restricted anyway.
Here are lifetime stats for the funds you mentioned, plus my ARLSX:
And, M* performance chart since MFLDX's inception:
Gundlach is one of the many sub-advisors.