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In my opinion, the long/short field of mutual funds is not needed in a diversified portfolio, mostly because there are very, very few of these funds that are any good. I don't own MFLDX and I would never buy it because of it's bloat, it's sell-out to Mainstay and it's high fee level. But, it if you are going to hold one of these funds for diversification, it is probably one of the 3 or 4 L/S funds worth owning. HSGFX could be the worst of the bunch.
Thanks for you comments. I elected to move on because I felt the AUM has just become to great to position the fund in short order to the ever changing macro environments through out the world.
1. Poor Fund Stewardship: As AUM have ballooned to $18.9B, there has not been a significant decrease in the exorbitant 1.39% management fee or the extremely high actual expense ratio of 2.66% (forget the M* data which is unreliable). Aronstein and the fund directors need to address this issue, but I doubt that they ever will as this fund is a very productive cash cow.
2. High Expenses Are a Headwind for Future Returns: There continues to be an inverse correlation between fund expenses and returns.
3. Troubled Space: There continues to be very few long-term winners in the L/S space, so your default position should be to avoid this space.
4. You Don't Need a L/S Fund: I have yet to read any objective evidence that investors need a dedicated L/S fund as part of a diversified portfolio. Fixed income may provide all the needed volatility dampening you need at a much lower cost.
Thanks for posting your comments on MFLDX. I think you covered all the bases including home plate. Nice long ball!