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Question on WBLRX

VintageFreakVintageFreak
edited October 2013 in Fund Discussions
Can someone please explain to me why Whitebox and M* thinks this is a market neutral fund? In what possible combination of 18.38% cash, 69.94% long, 0.96% short can one create a market neutral portfolio? Simple fact of the matter is it lost 0.93% today. On the other hand WBMRX which Whitebox lobbied to actually be classified as L/S lost only 0.16% and boasts more "long/short" ness to be actually classified market neutral.

Asset Allocation WBLRX
Asset Distribution
-100-50050100

Type % Net% Short % Long Bench-mark Cat AvgAs of 08/31/2013
Cash 18.38 0.00 18.38 — 41.34
US Stock 68.99 0.95 69.94 — 30.67
Non US Stock 9.91 0.00 9.91 — 10.79
Bond 0.00 0.00 0.00 — 13.35
Other 2.71 0.01 2.72 — 3.8

Comments

  • CharlesCharles
    edited October 2013
    Hi Vintage. I actually listened to the Whitebox Long Short quaterly call. Dr. Cross gave a pretty good explanation of the fund's market neutral strategy, summarized here:

    http://www.whiteboxmutualfunds.com/docs/lit/long-short/Commentary_Q2_2013.pdf
    </b

    Hope it helps.

    Hey, I noticed too the numbers yesterday. Tactical Opportunities lowered its beta this quarter, I believe due to headwinds foreseen. I also noticed that Tactical now has grown to $252M!
  • VintageFreakVintageFreak
    edited October 2013
    I will read that commentary, but I think basic math tells me the portfolio does not compute to a market neutral stance.
    Also WBLRX is supposed to be more conservative than WBMRX, or so I thought. I'm getting the feeling now it is the reverse.
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