Opportunities lie with global long/short managers

Research house Zenith Investment Partners’ latest assessment of the global long/short sector has concluded market conditions are making this an opportune time for managers in the space.

The “Global Long/Short Equities Sector Report” found managers offering those strategies generated an average return of 16.3 per cent for the year ended 30 September 2015. The result slightly underperformed the MSCI World Index’s return of 18.3 per cent for the same period.

However, on a risk-adjusted basis, global long/short funds had produced stronger returns, the research house said.

Zenith Investment Partners investment analyst Justin Tay believed the broader global equities landscape currently in play was one that favoured long/short managers.

“It has been refreshing to see a departure from the predominantly macro-driven markets over the past few years,” Tay said.

“The last 12 months in particular has exhibited high levels of performance dispersion within both geographies and sectors, providing greater opportunities for active managers to express their stock selection skills.

“This is of even greater significance for long/short managers, given the added flexibility available to them.”

He added the poor performance of the energy and materials sectors, which returned -33 per cent and -22 per cent respectively over the past year, had provided solid shorting strategy opportunities.


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