• Differences Among Long/Short Equity Funds

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    Long/short equity funds are one of the largest categories of single-strategy alternative mutual funds Morningstar tracks. Beware: the fund lineup is as diverse as it is deep. Individual long/short fund characteristics vary considerably. Without careful analysis, advisors risk picking a fund that performs quite differently than expected, or invites unintended risks into their client’s portfolio.

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  • Understanding Alternative Funds

    As alternative mutual funds proliferate, Morningstar faces a classification conundrum: How can single categories include funds with entirely different characteristics? The question has deep implications for advisors.



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  • Market Volatility Returns: A Rude Awakening

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    Market volatility has returned and if it seems like a jarring wake up; blame it perhaps on a market that lulled investors into a deep sleep. A byproduct of the lullaby market is that many investors came out of it groggy and have been slow to react to the more normalized volatility regime that emerged last year. The good news: there’s still time to respond.

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  • Reducing Market Volatility Using Hedged Equity

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    The ability to pare back losses during the inevitable downturns that come with investing, may actually matter more to the end goal than eking out every bit of a bull market’s gains.



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  • Risk Budgeting Using Alternatives

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    The return of volatility has brought opportunity. Before eyeing that entry point into a riskier asset class, however, advisors face a conundrum: How can they add a riskier — albeit attractively valued — asset class without upsetting the portfolio’s long-term risk profile?



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