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A Painful 2018 So Far for Prominent Long-Short and Market-Neutral Funds

Some of our Morningstar Medalist alternative funds have struggled so far this year, but we remain confident in their long-term prospects.

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It has been a tough year for market-neutral and long-short equity funds (including some large hedge funds). As the equity market entered a more volatile period with rising interest rates and tightening monetary policy, many investors shifted their attention to alternative investments, but many prominent and fast-growing alternative products offered by AQR and Boston Partners have struggled in 2018. While the year-to-date performances have been disappointing, these Morningstar Medalists stay the course and stick to their knitting.

Exhibit 1 shows some selected funds’ year-to-date returns through June 2018.

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Tayfun Icten does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.