New Credit Suisse Whitepaper Explores Long/Short Equity Strategies as an Alternative to Traditional Long-Only Equity Investing

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Aug 23, 2010, 09:41 ET

NEW YORK, Aug. 23 /PRNewswire-FirstCall/ -- Credit Suisse today released a new research paper, "Long/Short Equity: An Enhanced Approach to Long Term Equity Investing," that compares long-only equity strategies to long/short equity strategies.

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Despite evidence of an ongoing economic recovery, global equity markets continue to suffer from macroeconomic uncertainty and periods of volatility. Thus, investors continue to search for equity solutions that provide access to the equity market as well as potential for alpha. The paper explores the benefits of incorporating long/short equity strategies ("L/S Equity Strategies") into an overall portfolio allocation and addresses how L/S Equity Strategies can serve as a core equity holding.

Key points in the paper include:

L/S Equity Strategies seek to use stock selection and market timing strategies to produce alpha over long-only equity markets
L/S Equity Strategies (as represented by the Dow Jones Credit Suisse Long/Short Equity Hedge Fund Index) have generally outperformed long-only equity markets (as represented by the MSCI World Index) on both an absolute and risk-adjusted basis over certain periods of time;
Since 1994, L/S Equity Strategies have posted almost twice the gains of long-only equity markets, with approximately two thirds of the volatility, and
L/S Equity Strategies can provide some downside protection-L/S Equity Strategies experienced less than half the declines of the long-only equity markets between November 2007 and February 2009.

Click here to view the whitepaper.

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SOURCE Credit Suisse AG