ACTIONABLE ADVICE FOR FINANCIAL ADVISORS: Newsletters and Databases Focused on Investment Strategy

    Last 14 days

Most Popular Articles

Most Popular Commentaries

    Last Year

Most Popular Articles

Most Popular Commentaries

More by the Same Author

Alternative Investments
   Alternative Investments
   Hedge Funds
Specialty Investments
   Managed Futures
New Strategies in Alternative Investments
By Robert Huebscher
November 9, 2010

Go to page Previous, 1, 2, 4, Next     Bookmark and Share  Email Article   Display as PDF

Long-short funds have provided similar protection for the equity portion of a portfolio.  The data below show the maximum drawdowns for the HFRI equity hedge index (in black) and the S&P 500 (in blue) over the last 20 years:

Maximum  Drawdown

Long-short strategies have “cut off the bottom” in down markets. They have also underperformed in up markets, Welch said, but the gains have offset the losses “by a long shot.”  Similar results have been the case for non-US markets.

Welch also noted the remarkable track record of CTA funds (also known as managed futures), providing the data below for the HFRI macro systematic diversified index (in blue) and the S&P 500 (in grey):

Although CTAs have not consistently outperformed equities, the remarkable aspect of their performance is the absence of negative returns for any rolling three-year period in the last 18 years.

Go to page Previous, 1, 2, 4, Next     

Display article as PDF for printing.

Would you like to send this article to a friend?

Remember, if you have a question or comment, send it to .
Website by the Boston Web Company