Hedge Fund Strategies: Long/Short Equity
Overview
The long/short equity strategy is one of the more nimble hedge fund strategies whereby managers seek opportunities across global equity markets with the objective of outperforming traditional markets over a given cycle. One of the major advantages of the long/short equity strategy is that the managers have the flexibility to express their views in opposite directions. Long/short hedge funds use their ability to express a negative view on a particular stock, sector or market—along with timely shifts to portfolio exposure levels—to offer enhanced downside protection and the ability compound returns in a more attractive fashion.