Skip to Content
US Videos

So Far So Good for This Long-Short Equity Fund

Bronze-rated Schwab Hedged Equity has been a top-quartile risk-adjusted performer, but it hasn't yet faced a sustained downturn.


Patricia Oey: Bronze-rated Schwab Hedged Equity is a long-short equity strategy that employs a systematic process with a qualitative overlay. Comanagers Jonas Svallin and Wei Li both have extensive experience employing quantitative tools for investing, and they are supported by a five-person team.

The process starts by ranking a universe of about 3,000 U.S. companies using four types of screens: healthy or improving fundamentals, attractive valuations, momentum, and low risk. The managers take about 1,600 of the largest, highest-ranking names and then groups them by sector. They then apply another set of signals, which are customized by sector. Then the stocks are grouped into 55 industries and ranked. The managers use a portfolio-optimization software to reduce unintended bets on sectors or risk factors, as well as to minimize transaction costs. The team continuously monitors the portfolio and may make some adjustments after additional fundamental analysis.

Patricia Oey does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.