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3 Market-Neutral Mutual Funds to Mitigate Market Volatility
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In a volatile stock market, investors usually focus on a long-term strategy, which keeps them protected from concurrent ups and downs. Adding market-neutral funds to the portfolio often bails out investors by hedging their risk in prevailing market conditions. However, this is easier said than done.
Market-neutral funds are designed to provide returns that are relatively unaffected by the state of the overall stock market. Adding these to the portfolio should boost returns and reduce risk. They typically deliver returns by combining long and short positions in various securities.
Vanguard Market Neutral Fund is aimed at building a portfolio that is neutral with respect to the broad stock market risk. The volatility of a portfolio is measured in relation to the volatility of the whole stock market.
Vanguard Market Neutral Fund has three-year annualized returns of 8.8%. As of December 2022, VMNIX held 0.8% of its assets invested in Atkore Inc.
AQR Diversified Arbitrage Fund aspires to outperform the ICE BofAML US 3-Month Treasury Bill Index after fees while limiting its tracking risk compared to this benchmark. ADANX invests in a diverse portfolio of products such as stocks, convertible securities, debt securities, loans, warrants and derivative instruments.
AQR Diversified Arbitrage Fund has three-year annualized returns of 8.3%. John Eckert has been one of the fund managers of ADANX since 2022.
The Arbitrage Fund typically invests in equity shares of companies engaged in publicly disclosed mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations. ARBNX advisors follow a highly specialized investing strategy to benefit from the successful completion of the mentioned corporate actions.
The Arbitrage Fund has three-year annualized returns of 2%. As of November 2022, ARBNX has an expense ratio of 1.21% compared with the category average of 1.90%.
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3 Market-Neutral Mutual Funds to Mitigate Market Volatility
In a volatile stock market, investors usually focus on a long-term strategy, which keeps them protected from concurrent ups and downs. Adding market-neutral funds to the portfolio often bails out investors by hedging their risk in prevailing market conditions. However, this is easier said than done.
Market-neutral funds are designed to provide returns that are relatively unaffected by the state of the overall stock market. Adding these to the portfolio should boost returns and reduce risk. They typically deliver returns by combining long and short positions in various securities.
Below, we share with you three top-ranked market-neutral funds, viz. Vanguard Market Neutral Fund (VMNIX - Free Report) , AQR Diversified Arbitrage Fund (ADANX - Free Report) and The Arbitrage Fund (ARBNX - Free Report) . Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of market-neutral funds.
Vanguard Market Neutral Fund is aimed at building a portfolio that is neutral with respect to the broad stock market risk. The volatility of a portfolio is measured in relation to the volatility of the whole stock market.
Vanguard Market Neutral Fund has three-year annualized returns of 8.8%. As of December 2022, VMNIX held 0.8% of its assets invested in Atkore Inc.
AQR Diversified Arbitrage Fund aspires to outperform the ICE BofAML US 3-Month Treasury Bill Index after fees while limiting its tracking risk compared to this benchmark. ADANX invests in a diverse portfolio of products such as stocks, convertible securities, debt securities, loans, warrants and derivative instruments.
AQR Diversified Arbitrage Fund has three-year annualized returns of 8.3%. John Eckert has been one of the fund managers of ADANX since 2022.
The Arbitrage Fund typically invests in equity shares of companies engaged in publicly disclosed mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations and other corporate reorganizations. ARBNX advisors follow a highly specialized investing strategy to benefit from the successful completion of the mentioned corporate actions.
The Arbitrage Fund has three-year annualized returns of 2%. As of November 2022, ARBNX has an expense ratio of 1.21% compared with the category average of 1.90%.
To view the Zacks Rank and the past performance of all market-neutral funds, investors can click here to see the complete list of market neutral funds.
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