Stuck in neutral: a look at equity market neutral

Strategy: equity market neutral

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The dramatic swings in stock prices over recent years have given equity market neutral managers a real opportunity to prove their value. The results so far have been decidedly mixed.

Equity market neutral funds recorded average losses of 5.56% in 2009 and were down 1.16% in 2008, according to Hedge Fund Research.

That represents a significant premium over the S&P 500 and other equity funds. However, only a few market neutral funds have beaten their Treasury bill benchmark over that period.

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