Foreword
For those of us who invest, the next step beyond constructing a basic, well-optimized portfolio of stocks and bonds is the introduction of diversifiers such as venture capital, private equity, natural resources, real estate and alternative strategies, of which hedge and market-neutral investing are a part.
Market-neutral investments are attractive because they can substantially improve the performance characteristics of a traditional portfolio. A good market-neutral manager can produce better risk-adjusted returns than the market. Much of this is linked to the manager being able to take both long and short positions, perhaps using leverage as well. There is the dexterity that a manager can employ in exploiting niche inefficiencies. And ...
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