These Are the Top Long-Short Equity Mutual Funds

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There are several strategies that hedge and mutual funds use to earn returns for their investors, as well as lower their market exposure. One such strategy is long-short equity. Under this strategy, one takes long positions in the stocks that are expected to gain and short positions in the equities that may drop. It is […]

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March 31, 2021 4 min read

This story originally appeared on ValueWalk

There are several strategies that hedge and mutual funds use to earn returns for their investors, as well as lower their market exposure. One such strategy is long-short equity. Under this strategy, one takes long positions in the stocks that are expected to gain and short positions in the equities that may drop. It is a time tested strategy that has proven effective most times. Let’s take a look at the top ten long-short equity mutual funds.

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Top Long-Short Equity Mutual Funds

We have used the past one-year return data (from U.S. News) to come up with the top long-short equity mutual funds. Following are the top ten long-short equity mutual funds:

  1. Global Tactical Fund (GIVYX, 25%)

The objective of the fund is long-term capital appreciation. GIVYX primarily invests in equity securities and exchange-traded funds (ETFs). Under normal circumstances, the fund invests a minimum of 40% of its total net assets in global securities. It has a net expense ratio of 3.3%. GIVYX has $18.53 million in total assets.

  1. Toews Hedged U.S. Fund (THLGX, 26%)

The objective of the fund is long-term capital appreciation, as well as limit risk when the market is unfavorable. THLGX largely invests in equity index futures contracts, U.S. large cap stocks, ETFs investing in U.S. large cap stocks, investment grade fixed income securities and more. It has a net expense ratio of 1.25%, and has returned 11.80% over the past three years, 12.36% over the past five years and 6.80% over the past decade. THLGX has $156.43 million in total assets.

  1. Clough Global Long/Short Fund (CLOVX, 26%)

The objective of the fund is long-term capital appreciation. CLOVX takes long and short positions in the equity securities (including preferred stocks) in the U.S. and non-U.S. (at least three) markets. It has a net expense ratio of 1.68%, and has returned 8.04% over the past three years, and 9.23% over the past five years. CLOVX has $81 million in total assets.

  1. Highland Healthcare Opportunities Fund (HHCAX, 26%)

The objective of the fund is long-term capital appreciation. HHCAX invests at least 80% of its total assets in companies related to healthcare or medicine. It has a net expense ratio of 2.72%, and has returned 15.05% over the past three years, 9.27% over the past five years and 6.39% over the past decade. HHCAX has $26.47 million in total assets.

  1. Navigator Equity Hedged Fund (NAVAX, 28%)

The objective of the fund is long-term capital appreciation. NAVAX invests across various sectors through ETFs that invest in equity securities. Moreover, it uses volatility-linked exchange-traded notes for the purpose of hedging. It has a net expense ratio of 1.32%, and has returned 6.44% over the past three years, 9.11% over the past five years and 3.77% over the past decade. NAVAX has $30.48 million in total assets.

  1. Toews Hedged U.S. Opportunity Fund (THSMX, 40%)

This objective of the fund is long-term capital growth, as well as limit risk at the time of unfavorable market conditions. THSMX largely invests in equity index futures contracts on equity indices. It has a net expense ratio of 1.25%, and has returned 11.01% over the past three years, 9.49% over the past five years and 4.39% over the past decade.

  1. Alger Dynamic Opportunities Fund (SPEDX, 41%)

The objective of the fund is long-term capital appreciation. SPEDX invests in U.S. and foreign equity securities, including common and preference shares, as well as convertible securities. It has a net expense ratio of 2.01%, and has returned 16.45% over the past three years and 15.18% over the past five years.

  1. RiverPark Long/Short Opportunity Fund (RLSIX, 41%)

The objective of the fund is long-term capital appreciation, as well as managing downside volatility. RLSIX invests in equities exhibiting above-average growth prospects and short equities that don’t exhibit long term growth prospects. It has a net expense ratio of 1.75%, and has returned 18.22% over the past three years and 17.42% over the past five years.

  1. Water Island Long/Short Fund (ATQIX, 46%)

The objective of the fund is capital appreciation along with lower volatility than the broad equity market. ATQIX uses “long/short” investment strategy and manages risks by buying equities that are undervalued and selling overvalued stocks. It has a net expense ratio of 1.66%, and has returned almost 14% over the past three years and 12% over the past five years.

  1. ABR Dynamic Blend Equity & Volatility (ABRVX, 48%)

The objective of the fund is to correspond to the performance of the ABR Dynamic Blend Equity & Volatility Index. ABRVX invests a minimum of 80% of its net assets in securities and instruments offering exposure to the constituents of the index powered by Wilshire. It has a net expense ratio of 2%, and has returned 14.43% over the past three years and over 10.86% over the past five years.

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