An aging bull market, the flattest S&P 500 performance YTD since 1904, interest rates likely to remain low even after the upcoming Fed raise, rising corporate spreads, headwinds in emerging market equities & commodities, persistently low implied equity volatility – many indicators suggest this is a good time to go long & short rather than long only.
Our allocation engines concur. They contain both long & short positions when left unconstrained. This is true for both multi-asset and equity-only portfolios.
Many long-only portfolios, even if well diversified, are not performing well this year, and they may no longer deliver the kinds of returns they did since early 2009.
A low rate, low return world requires investors to explore going both long & short to continue to generate acceptable returns in the future.
We are building the ALPIMA platform with this in mind, so our clients can switch from long-only to long/short strategies at the click of a button.