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.