A war in Iraq could make capital preservation tricky

US long/short funds are performing well compared with their peers in other jurisdictions, but managers note the potential for war in Iraq poses a threat to capital preservation.

The overriding key to success in the current volatile market environment is disciplined risk management, according to Julian Wheeler, manager of Gulf International Bank's Falcon US Long/Short fund.

Wheeler has maintained the Falcon fund on a broadly neutral stance between long and short positions investing on the basis of