Why would any current shareholder continue to own this fund (ARLSX / ALSIX / ARLZX)? It's being changed from a long-short fund (with nearly all assets in US equities or cash) to an international value fund. And it's going to make a huge taxable distribution (see last paragraph above), so there's no point in holding on for tax purposes.
Why would AMG (or RIver Road Asset Management, the subadvising firm) not simply liquidate the fund? Since it has under $10M AUM, it's not as though there is a lot of money being managed that it would like to hold on to.

The only L/S fund that's been around for the full market cycle and has qualified as a Great Owl, is Hundredfold Select Alternatives (SFHYX). That's not an endorsement, just a statistical report. It has outperformed its peers by 2.7% annually for the full cycle.
The star is Boston Partners Long/Short Equity (BPLSX), which is closed. Ali Motamed, who comanaged the fund from 2013-15 and worked at the adviser from 2003-15, now manages Balter Invenomics (BIVIX). It launched last year and has outperformed BPLSX, though with noticeably more volatility.
Though not technically a long/short fund, Litman Gregory Masters Alternative Strategies (MASNX) has a solid cast and great long term record. Swan Defined Risk (SDRIX) is an interesting options-based fund that we've written about. At base, the manager argues that you can't protect against all risks so you have to define the one you're hedging. In his case, the fund is constructed to buffer a major market drop but doesn't try to dodge smaller options. River Road Long-Short (ARLSX) has modestly outperformed the L/S group since launch with substantially less volatility. If you use the search function on the "Commentary" page, you'll get some text about each of them.
Finally, I'd strongly consider investing in a fund that holds a lot of cash. They function exactly like a L/S fund: reduced volatility and reduced returns when the broad market is rising, reduced losses and increased returns when the market falls. In our February issue, I'll name the 15/15 funds: funds with at least 15% cash that had total returns of at least 15% last year.
For what that's worth,
David

Back in May 14, there was a discussion title re ARLSX which became a broad discussion of L/S and a number of funds in the category. I own WBMIX and it's been okay and I would like to try another fund with the idea of doing better than a bond funds and getting better returns in the event of a serious meltdown in US. Seems like there is a lot of risk in the equity mark. Any suggestions?

All good thoughts.
I dropped ARLSX a while ago, just because I did not care for how it behaved, and put the moneys into RGHVX and GLRBX. You might check them out; I would recommend the latter over the allocation funds already mentioned. RGHVX I am waiting to see about (not fine prose, sorry).
As others have suggested knowing, how old, tolerance of risk, what kind of moneys are we talking here (macro and gross, not details, do not want to seem intrusive)? I would not argue against canning ARLSX for sure. But tell us more, please.

First. You need to tell why you biught a ls fund , and then why you chose ARLSX. Otherwise i am sorry,but we are just creating spam on mfo

Here's summary of latest ratings for VintageFreak's list (funds at least 1 year old):
http://www.mutualfundobserver.com/fund-ratings/?symbol=+BPRRX+BGRSX+ARLSX+RLSFX+RSAFX+LSOFX+WBMAX+WBLSX+TFSMX+TFSSX+PMHDX+WMCNX+IRONX+NLSAX+NABAX+OTCRX+MASNX+RNBWX&submit=Submit
If you sort on Risk, top performers rise to top...interesting...Litman Gregory Master Alt Strats In (MASFX), RiverPark Structural Alpha Institut (RSAIX), Ironclad Managed Risk (IRONX), and Robeco Boston Partners L/S Rsrch In (BPIRX).

Thank you Charles! I keep forgetting this feature you added.

Here's summary of latest ratings for VintageFreak's list (funds at least 1 year old):
http://www.mutualfundobserver.com/fund-ratings/?symbol=+BPRRX+BGRSX+ARLSX+RLSFX+RSAFX+LSOFX+WBMAX+WBLSX+TFSMX+TFSSX+PMHDX+WMCNX+IRONX+NLSAX+NABAX+OTCRX+MASNX+RNBWX&submit=Submit
If you sort on Risk, top performers rise to top...interesting...Litman Gregory Master Alt Strats In (MASFX), RiverPark Structural Alpha Institut (RSAIX), Ironclad Managed Risk (IRONX), and Robeco Boston Partners L/S Rsrch In (BPIRX).

Let me clarify what I meant by "monitor". I'm trying to ask questions to myself and answer them to see if these are candidates worthy of purchase. I already own some of these, so it makes sense to go see what you thought about the fund doing for you and whether you screwed up .
For example, I've been toying with RNBWX. So today I'm asking myself this question: How does a fund with 3 quarters of its assets in cash, strategy of using options for protection, still happen to drop 1.36% yesterday?
Another example. LSOFX. Is this simply another fund like CGMFX, which except for trading more frequently, is simply making upside and downside bets, instead of actually managing risk in any meaningful way. In other words, is this simply another fund like which can screw up on the long positions AND short positions and actually end up performing worse than any long only or short only fund? With 1 third of assets in cash it still managed to lose 2% yesterday.
Finally, are funds like TFSMX, WMCNX, WBMAX, etc. really the kind of funds you want to be invested in rather than PMHDX or ARLSX or RLSFX?

I think we are getting to the point where L/S fund need to start earning their keep. I'm monitoring the following funds.
BPRRX
BGRSX
ARLSX
RLSFX
RSAFX
LSOFX
WBMAX
WBLSX
TFSMX
TFSSX
PMHDX
WMCNX
IRONX
NLSAX
NABAX
OTCRX
MASNX
RNBWX
GDAMX
PFSDX

the asset flows for the Long/Short Equity category (mutual funds, ETFs) is $417 million (as of 7/31/14) from morningstar August report. That is quite a lot asset flows.
ARLSX has 1.20% management fees and has 7.84% return rate since inception.

a 2.00% management fee and a 3.2% expense ratiod.

Run away...
Professor Greenblat has been absorbed by the dark side.
c

:) true. Then again L/S funds don't exactly come cheap. Actually I don't care about THIS new fund. Gotham has some other funds though that look interesting. Cost is an issue there as well, but then it did not stop me from buying ARLSX.

A brutal day today 7/31/2014:
Markets:
Dow -1.88%
Nasdaq -2.09%
S&P -1.98%
Russell 2000 -2.31%
EFA -1.67%
EEM -1.75%
GLD -1.15%
GDX -2.12.%
AGG -0.12%
Alternative Funds:
Whitebox Market Neutral Equity Investor WBLSX +0.09%
Whitebox Tactical Opportunities Investor WBMAX +0.55%
ASTON/River Road Long-Short N ARLSX -0.67%
BlackRock Global Long/Short Equity Inv A BDMAX +0.17%
PIMCO EqS Long/Short D PMHDX -1.53%
MainStay Marketfield I MFLDX -0.91%
Robeco Boston Partners L/S Equity Inv BPLEX +0.19%
Robeco Boston Partners L/S Rsrch Inv BPRRX -0.87%
RiverPark Structural Alpha Retail RSAFX -0.86%
RiverPark Long/Short Opportunity Retail RLSFX -1.38%
RiverPark/Gargoyle Hedged Value Retail RGHVX -1.59%
AQR Multi-Strategy Alternative N ASANX -0.30%
AQR Diversified Arbitrage N ADANX 0.00%
AQR Risk Parity N AQRNX -1.44%

Pondering getting more defensive.
Thinking of replacing all my FCPVX with PVFIX.
Thinking of selling my TGBAX in a taxable account and replacing it with DODLX in my Roth.
Wondering if I should buy more FMLSX or instead some ARLSX or RGHVX.
Recently added RSEMX. Bought some more AQMNX.

David also hosted an hour phone call/teleconference with the PMs at RGHVX, which I thought was very informative...like just about all these calls. Here is link to the summary and mp3:
http://www.mutualfundobserver.com/2014/03/riverparkgargoyle-hedged-value-rghvx-3/
And, here is link to similar call with the good folks at ARLSX:
http://www.mutualfundobserver.com/2014/02/astonriver-road-long-short-arlsx/

This is a great thread. Thanks to all for your opinions. I had been researching LS funds for some time and eventually I stayed with American Century whom I have most of my assets with. I selected ACDJX and it has done fairly well so far. I understand the volatility aspect of these funds and how this fund along with most others is using the short aspect of the fund to increase returns and not for protection.
I ran a two year chart of ACDJX and ARLSX and came up with this. Any thoughts?
Edit; I did a two year chart because ACDJX hasn't been out for three years .
Sorry for the link. I haven't checked how to insert images yet.
http://www.nasdaq.com/aspx/mutual-fund-chart.aspx?timeframe=2y&index=&symbol=ARLSX&symbol=ACDJX&selected=ARLSX

It is a bit odd to judge a L/S fund by returns over less than a market cycle let alone less than 3 years in a relatively straight up bull market. Better to understand the portfolio and strategy instead if you want to take a chance on new funds. Make sure any statistics you use are meaningful.
Whitebox may turn out to be a good fund. It seems to take big falling tide sector bets on short side rather than big short bets on individual stocks unlike BPLEX or the primarily long ARLSX. How they handle the reversals in the sectors will determine how the fund does. BPLEX performance will depend on how they pick stocks and net positions in a sector. It went market neutral in 2013 and lagged. So, all strategies have good and bad scenarios.
The only meaningful hint in WBMAX lifetime so far has been the small correction in 2012 and its behavior during that time wasn't great but too short a period and too few data points to judge.

Working to add lifetime return rankings to MFO risk profiles...soon, I hope.

Over ARLSX lifetime, it's a top quintile L/S fund in risk adjusted return (through Mar '14):

And ARLSX, it too has kept up pretty well since inception:

Looking at the behavior of this fund over the last 3 years, they don't seem to be good at it.
Don't know much about this fund regarding strategy but they don't seem to take big macro or fundamentals based bets on the short side. They have no short positions in their top 20 positions, just enough to hedge. They have made big long bets on some small and mid caps that have suffered terribly this year which implies their stock picking skills aren't that great either.
Compare the positions to a good L/S fund like BPLEX that is willing to take big short bets when macro conditions warrant it and benefits from it. Boston Partners seem to be the only fund family that really knows how to do L/S right. They will lag a bit in roaring bull markets but definitely exploit down and sideways markets as L/S should (as opposed to hedged market neutral funds). Much better full cycle returns.
ARLSX looks more like a market neutral fund and not a good one.