Saturday, January 8, 2011

Market Neutral Fund

A Market Neutral Fund is a fund which seeks to deliver returns through using market neutral investment strategies. Typically the benchmark for these types of funds is the risk-free return plus e.g. 300-600 basis points. The types of strategies that these funds employ (e.g. long-short, use of derivatives, arbitrage, etc) are typical of those practices found in hedge funds, these funds also tend to have higher turnover ratios and charge higher fees.

Synonyms: Market neutral investor

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