ASTON / River Road Long Short (ARLSX)

The fund:

ASTON / River Road Long Short (ARLSX)


Matt Moran and Dan Johnson

The call:

Highlights of the call:

In December 2012, we spoke with Matt and Dan about the River Road Long Short Strategy, which is also used in this fund. With regard to the strategy, they noted:

  • they believe they can outperform the stock market by 200 bps/year over a full market cycle. 
  • they believe they can keep beta at 0.3 to 0.5. They have a discipline for reducing market exposure when their long portfolio exceeds 80% of fair value. 
  • risk management is more important than return management, so all three of their disciplines are risk-tuned. 
  • River Road is committed to keeping the strategy open for at least 8 years.
  • The fund might be considered an equity substitute. Their research suggests that a 30/30/40 allocation (long, long/short, bonds) has much higher alpha than a 60/40 portfolio.

podcastThe conference call (When you click on the link, the file will load in your browser and will begin playing after it’s partially loaded.)

The profile:

Long/short investing makes great sense in theory but, far too often, it’s dreadful in practice.  After a year, ARLSX seems to be getting it right and its managers have a pretty cogent explanation for why that will continue to be the case.

The Mutual Fund Observer profile of ARLSX, dated June 2012.

podcastThe ARLSX audio profile


For information about the Aston mutual fund, subadvised by River Road, please see the following:

Aston Asset Management

2013 Q3 Report

Fact Sheet

ARLSX Profile Sheet

Fund Focus: Resources from other trusted sources