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DAILY ALTS: Market Neutral Funds: Best And Worst Of November

TedTed
in Fund Discussions
FYI: Market-neutral funds balance long and short holdings, generally in pursuit of something close to a 0% net-long exposure. This allows investment managers to neutralize beta and focus on generating alpha – or at least, that’s the idea.

In November, the top three market-neutral mutual funds generated returns ranging from +0.94% to +3.52%, while the category’s three laggards returned between -2.53% and -3.19%. In this month’s review, we look beyond November’s performance and also consider the composition of each of the featured funds’ three-year standard deviation and Sharpe ratio.
Rregards,
Ted
http://dailyalts.com/market-neutral-funds-novembers-best-and-worst/

Comments

  • BobCBobC
    We track and use two, neither of which were on the list, which I suppose is good. Vanguard VMNFX is up more than 5% in the last year, dang good for this conservative, low-cost fund. AQR Equity Market Neutral QMNIX has had an amazing year, although the management will tell you the 18% return YTD is not something to be expected on a regular basis. It is more expensive than VMNFX, but is also a lot more active, but its 1.3% ER is lower than a lot of alts.
  • Bitzer
    Yes, I like both the Vanguard and (especially) the AQR offerings. Unfortunately many individual investors have been locked out of these funds (at least at Fidelity) with unrealistically large minimum purchase requirements.
  • MarkMark
    @Bitzer - you can purchase the investor share class of the AQR fund (QMNNX) for $2500.00 through Fidelity if interested. The Vanguard offering will cost you $250K minimum plus a $75 TF.
  • AndyJ
    edited December 2015
    At Fidelity, there is a $2,500 initial buy for AQR, but it's only in retirement accounts. (Bitzer, the Fees and Distributions page for a fund is the place to look at Fido for the details on cost & purchase minimums - the Summary page is the abbreviated version.)
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