Saturday, June 9, 2012

Long-Short Fund

A Long-Short Fund is a type of investment fund which can both go long (i.e. buy) and go short (i.e. sell-short). Typically Long-Short Funds will stick to a constant ratio of long to short positions; some funds will take a market neutral strategy by combining equal and offsetting long and short positions, while others may use a smaller amount of short positions e.g. in the case of a 130/30 fund which is long 130% of the portfolio and short 30%. Long-Short strategies are common among hedge funds and absolute return funds. The contrasting, or opposite type of fund is a long-only fund, which will only go long, or buy stocks.

Similar Fund Terms: 
Market neutral fund, 130/30 fund, Absolute return strategies, Hedge fund

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Fund Management Terminology and Concepts Explained:

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