Market Neutral

Dictionary Says

Definition of 'Market Neutral'

A strategy undertaken by an investor or an investment manager that seeks to profit from both increasing and decreasing prices in a single or numerous markets. Market-neutral strategies are often attained by taking matching long and short positions in different stocks to increase the return from making good stock selections and decreasing the return from broad market movements. Market neutral strategists may also use other tools such as merger arbitrage, shorting sectors, and so on. There is no single accepted method of employing a market-neutral strategy.
Investopedia Says

Investopedia explains 'Market Neutral'

Managers who hold a market-neutral position are able to exploit any momentum in the market. Hedge funds commonly take a market-neutral position because they are focused on absolute  as opposed to relative returns.

A market-neutral position may involve taking a 50% long, 50% short position in a particular industry, such as oil and gas, or taking the same position in the broader market.

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Articles Of Interest

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    Find out how these mutual funds can add some flavor to your bland portfolio.
  2. The Secret To Finding Profit In Pairs Trading

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  4. Hedge Funds Hunt For Upside, Regardless Of The Market

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  5. Hedge Funds: Higher Returns Or Just High Fees?

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  7. Taking A Look Behind Hedge Funds

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  8. MarketNeutral.com

    FAQ's about market neutral investing.
  9. 12b-1: Understanding Mutual Fund Fees

    Many mutual funds charge investors a 12b-1 fee to pay for marketing and promotion expenses.
  10. 5 Common Misconceptions About ETFs

    The rise in these funds' popularity has contributed to misinformation about what they are and how they work. Learn more here.

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