When we introduce long/short equity to financial advisors, this is the chart that gets us pretty close to a “drop the mic” moment.
As you can see, long/short equity, as measured by the Credit Suisse Long/Short Equity Index, has outperformed the S&P 500 and the MSCI World Index over 20 years—with less volatility and lower drawdowns. Any questions?
Consideration of long/short equity is resonating especially now in this period of record high market valuations at a time of heightening geopolitical concerns, slowing economic dynamics, and a Federal Reserve that may be less accommodating to equity markets moving forward.
Financial advisors, to learn more, talk to a Calamos Investment Consultant at 888-571-2567 or email firstname.lastname@example.org.
Alternative investments may not be suitable for all investors. Long/Short investing risks include the risk of equity securities market prices declining in general and short sale risk which has potential for unlimited losses.
The Credit Suisse Long/Short Equity Hedge Fund Index is a subset of the Credit Suisse Hedge Fund Index that measures the aggregate performance of long/short equity funds. Long/short equity funds typically invest in both long and short sides of equity markets, generally focusing on diversifying or hedging across particular sectors, regions or market capitalizations. Managers typically have the flexibility to shift from value to growth; small to medium to large capitalization stocks; and net long to net short. Managers can also trade equity futures and options as well as equity related securities and debt or build portfolios that are more concentrated than traditional long-only equity funds.
The MSCI World Index is a measure of the performance of the global stock market, for developed markets.
The S&P 500 Index is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation. It is widely regarded as the standard for measuring U.S. stock market performance.