Hedge Funds versus Hedged Mutual Funds: An Examination of Equity Long/Short Funds

David F McCarthy

Journal of Alternative Investments,
Vol 16, No 3 (2014): Winter 2014


This article offers comparative analyses of equity long/short mutual funds and equity long/short hedge funds and indices. It first identifies a universe of liquid alternative mutual funds employing an equity long/short investment strategy similar to most equity long/short private hedge funds. It then provides a general profile of these mutual funds (e.g., size, start dates, sponsorship) before comparing their equity exposure and investment performance to that of private placement equity long/short hedge funds and indices. Based on the data analyzed, the article concludes that, as a group, diversified single-manager equity long/short mutual funds offer similar equity exposures and do not perform materially differently from comparable private placement hedge funds, at least as represented by leading hedge fund indices.

The full paper can be found on JAI at: https://jai.pm-research.com/content/16/3/6