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How have your Alt funds held up

The last couple of weeks have been somewhat volatile versus 2017 and I realize it is certainly a short sample size but asking if anyone invested in long/short, low vol, unique strategic funds relative to basic stock funds performed over the last few weeks. Have the funds reacted as you thought they would or should? Or is it really too early to tell?


  • TedTed
    edited February 2018
    @Bud &MFO Members: Sorry about that, don't own any alt funds, nor would I
  • Ted said:

    @Bud &MFO Members: As of 2/9/18:
    TBCIX 2.41%
    QQQ 0.22%
    MSOPX 0.55%
    PONCX -(.80)%
    IVV -(1.93)%
    PBDCX -(2.28)%

    Not Alt funds... SMFH
  • edited February 2018
    Hi Bud, I have two "alt" equity funds, a L/S and a M/N, that have done very well in the few years I've owned them. The M/N fund in particular I've found valuable in "nothing's working" markets; it's got the volatility of bonds, but typically beats good bond funds in total return and runs with low correlations to both stock and FI.

    Those two (AQR funds), tho, are both top o' the heap in their categories and closed to new investors, so I wouldn't generalize from them. I don't know other similar funds I'd put $ into if they weren't available. It's a challenge to do the research; just in L/S, there are several different basic strategies managers employ, plus with manager idiosyncracies pretty much everywhere. I think a fund that's broadly diversified with at least an overlay of a quant strategy is where you'd be most likely to find something worthwhile.

    In that vein, there's a relatively new world allocation fund, CCAPX, that some people like; one of the managers is a quant guy, and they use strategic (tactical?) shorts, mostly against various indexes, so kind of alt-lite. You might check it out. (It's available at Fidelity for $2,500 minimum and their $50 purchase-only transaction fee, so don't go by just the M* figures on availability.)
  • Both the AQT L/S and M/N offerings are excellent, with the L/S fund outperforming the M/N fund over the past few years, which has coincided with a bull market. I wonder if this will reverse if/when a bear market sets in.
  • edited February 2018
    Hi Bitzer, that'd be the expectation from the way they're built, and it's the way it worked the only down quarter for the S&P (Q3 2015) since both funds have been around.

    L/S is M/N + a long overlay, about 50%, which if I recall right is variable. Plus, M/N doesn't mean in AQR's case that it's always at net zero exposure; the idea is market neutral over a cycle.

    Best, AJ
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