RT Journal Article
SR Electronic
T1 Equity Market-Neutral Hedge Funds
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 47
OP 51
DO 10.3905/jwm.2002.320433
VO 5
IS 1
A1 Edward Wright
YR 2002
UL https://pm-research.com/content/5/1/47.abstract
AB This exploration of equity market-neutral hedge fund strategies starts with a description of the mechanics of the strategy and then, observing that market-neutral strategies have not been particularly successful recently, investigates the key performance drivers. The author concludes that a focus on market volatility as the main driver of poor relative performance is misguided. Rather, a weakening of the traditional link between economic fundamentals and valuations is the main culprit. He therefore concludes that the time to add to equity market-neutral strategies must be when investors perceive that extremes of emotions have been addressed and a more predictable relationship between fundamental and market developments is reestablished.