The Look of a Long-Short, Market-Neutral Equity (LSMNE) Investment

Blue Rock’s LSMNE strategy gives an investor exposure to a variety of proven stock selection methodologies in a highly-disciplined, risk-controlled framework.

Using market-neutral as a “risk framework” enables a portfolio manager to consistently structure a low volatility portfolio, one that mitigates market-related risks and thereby derives value-added/alpha from ‘stock picking’.

At the same time, employing long-short as the ‘stock picking’ strategy enables a portfolio manager to balance the inefficiencies present in long-only strategies and thereby perform well in most market conditions.

The marriage of the powerful market-neutral risk discipline with a well balanced long-short stock selection methodology provides investors with the unique opportunity to consistently achieve attractive returns while maintaining a very low level of volatility.

The graphic below illustrates how a LSMNE investment mitigates market-related risks, then mitigates factor risks by establishing long and short positions, and finally diminishes company specific risk through diversification and long/short holdings.

Chart: Sample Long-Short Portfolio Construction and Return Sources