Absolute return, long only hedge funds?
I've noticed that a large number of hedge funds I come across describe their strategy as 'long only, absolute returns'. Is this not an oxymoron? Mathematically, unless they are heavily investing in some unorthodox companies that provide insurance against macro risk, this seems to be impossible.
Bump.
Sounds like its just a beta management strategy
We've seen some of these. They fall into 3 categories:
1) Highly concentrated portfolios (sometimes less than 15 positions) and believe that they are superior stock pickers and therefore can still classify it as "Absolute Return" 2) A mirrored long book from a HF's L/S fund. Literally just a long only fund that is run by a HF charging extra fees 3) Only invest in the long side but will hedge with things like puts
Most aren't deserving of higher fees than traditional long only (though you can argue that about a lot of HFs too).
With regards to 3), doesn't utilising options involve implicit short-selling? That is why I didn't consider options strategies as part of this.
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