Long-Short Masterclass Summary

Volatility brings opportunity

With the volatility and uncertainty caused by the COVID-19 pandemic, advisers have naturally been searching for options to solidify portfolios and protect from another unexpected market collapse. As the name suggests, long-short strategies invest long and sell short equities. Compared to longonly strategies, they tend to have lower sensitivity to equity market movements and offer diversification.

The discipline in a long-short strategy is to wear two very different hats. Long holdings are based on tried and tested processes and fit within the fund managers style, be that growth, GARP or value. On the other hand, the universal view is that shorting should not be based only on valuation and should be more than a contrarian style determined to destabilise markets. There is a long list of potential benefits from investing in a long-short strategy.

In this Masterclass we heard from five experts who explored the various ways they tackled long-short investing, the strategies they employed, the differing risk profiles and benefits of each strategy. This report provides a short summary of each presentation and the key learning outcomes. During the Masterclass we covered every aspect of the sector including:

1. Defining the universe of long-short strategies
2. The fundamentals of long-short
3. Understanding the unique long-short risk profiles
4. Generating alpha through a market-neutral approach
5. Incorporating long-short into portfolios