What is a long-short equity strategy?

Long-short equity is an investing strategy that takes long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline. A long-short equity strategy seeks to minimize market exposure while profiting from stock gains in the long positions, along with price declines in the short positions.

What are the benefits of a long/short investment strategy?

Some of the potential benefits of a long/short investment strategy include: Portfolio diversification. Unlike long-only strategies, in a long/short investment strategy, managers buy stocks and bonds that they expect to outperform the market, while taking short positions in assets they expect will underperform.

What are the different types of long/short strategies?

There are various types of long/short strategies, including: Sector specific. Focus on a certain sector or industry, such as banking, technology or pharmaceuticals. Geographic. Invest in specific markets or regions of the world, such as the U.S., Europe or emerging markets. Market neutral.

What is the difference between long-only and short-selling?

Long-only managers can decrease portfolio weights only to zero; short-selling effectively assigns negative portfolio weights to securities on which they have a pessimistic view. Through short-selling, managers extend beyond their traditional long-only roles into newer strategies. Q: What kind of investment strategies?