We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Buy These 3 Market Neutral Funds for Great Returns
Read MoreHide Full Article
U.S. stock markets have been volatile for a pretty long stretch. Given the prevailing erratic economic conditions, a market-neutral fund is particularly relevant for protecting one’s invested capital. This type of fund is designed to provide stable returns at relatively lower levels of risk regardless of market direction.
Market-neutral funds aim to adopt a precision approach by shorting 50% of their assets and holding 50% long. This method seeks to identify pairs of assets whose price movements are related. The fund goes long on the outperforming asset and shorts the underperformer.
Say, for instance, you take a $1 million long position in Pfizer and a $1 million short position in Wyeth, both large pharmaceutical companies. If pharmaceutical stocks fall, you will lose because of your long position in Pfizer but gain from the short position in Wyeth.
Touchstone Ares Credit Opportunities Fund seeks capital appreciation by investing most of its net assets, along with borrowings, if any, in a wide variety of debt securities or other debt instruments. TMAYX invests in U.S. and foreign debt instruments.
Touchstone Ares Credit Opportunities Fund has a three-year annualized return of 2.6%. Seth Brufsky has been one of the fund managers of TMAYX since 2015.
BlackRock Event Driven Equity Fund Investor AShares seeks capital growth by investing most of its net assets in equity, derivative instruments, depository receipts, and other instruments with similar economic features. BALPX chooses to invest in event-driven strategies, especially in companies that have announced a material change.
BlackRock Event Driven Equity Fund Investor A Shares has returned 2.8% in the past three years. As of February 2022, BALPX held 96 issues, with 81.5% of its assets invested in Total Short-term Investments.
Hussman Strategic Growth Fund typically invests most of its assets in common stocks picked by the investment advisors. HSGFX may use options and index futures, and other hedging strategies, to balance the fund’s exposure during unfavorable market conditions.
Hussman Strategic Growth Fund fund has three-year annualized returns of 7.1%. HSGFX has an expense ratio of 1.15% compared with the category average of 1.92%.
Image: Bigstock
Buy These 3 Market Neutral Funds for Great Returns
U.S. stock markets have been volatile for a pretty long stretch. Given the prevailing erratic economic conditions, a market-neutral fund is particularly relevant for protecting one’s invested capital. This type of fund is designed to provide stable returns at relatively lower levels of risk regardless of market direction.
Market-neutral funds aim to adopt a precision approach by shorting 50% of their assets and holding 50% long. This method seeks to identify pairs of assets whose price movements are related. The fund goes long on the outperforming asset and shorts the underperformer.
Say, for instance, you take a $1 million long position in Pfizer and a $1 million short position in Wyeth, both large pharmaceutical companies. If pharmaceutical stocks fall, you will lose because of your long position in Pfizer but gain from the short position in Wyeth.
Below, we share with you three top-ranked market-neutral funds, viz., Touchstone Ares Credit Opportunities Fund (TMAYX - Free Report) , BlackRock Event Driven Equity Fund Investor A Shares (BALPX - Free Report) and Hussman Strategic Growth Fund (HSGFX - Free Report) . Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of market neutral funds.
Touchstone Ares Credit Opportunities Fund seeks capital appreciation by investing most of its net assets, along with borrowings, if any, in a wide variety of debt securities or other debt instruments. TMAYX invests in U.S. and foreign debt instruments.
Touchstone Ares Credit Opportunities Fund has a three-year annualized return of 2.6%. Seth Brufsky has been one of the fund managers of TMAYX since 2015.
BlackRock Event Driven Equity Fund Investor A Shares seeks capital growth by investing most of its net assets in equity, derivative instruments, depository receipts, and other instruments with similar economic features. BALPX chooses to invest in event-driven strategies, especially in companies that have announced a material change.
BlackRock Event Driven Equity Fund Investor A Shares has returned 2.8% in the past three years. As of February 2022, BALPX held 96 issues, with 81.5% of its assets invested in Total Short-term Investments.
Hussman Strategic Growth Fund typically invests most of its assets in common stocks picked by the investment advisors. HSGFX may use options and index futures, and other hedging strategies, to balance the fund’s exposure during unfavorable market conditions.
Hussman Strategic Growth Fund fund has three-year annualized returns of 7.1%. HSGFX has an expense ratio of 1.15% compared with the category average of 1.92%.
To view the Zacks Rank and the past performance of all market-neutral funds, investors can click here to see the complete list of market neutral funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>