RGHVX The most important aspect of any true long-short equity fund is the experience and expertise of the management. And as we also know, there is often a big disconnect between how a true hedge fund performs and what its "clone" of a mutual fund can do. Daily liquidity, daily valuations, and other mutual fund requirements force managers to take positions they would not otherwise do if it were hedge fund dollars. MFLDX lead manager Michael Arronstein is about as insightful as anyone, and for us anyway, we employ long-short NOT to top the charts in good years, but rather to hedge downside losses in bear markets. MFLDX lost 12% in 2008, which is better than all L-S funds that have acceptable bull-market returns since then. I, too, dislike the higher fees associated with true L-S funds, but am willing to pay that price for real downside protection and acceptable upside gains. Comparison of MFLDX to the S&P 500 is fine by me, since that is what the management uses. I don't yet see any compelling reason to own RGHVX.
RGHVX Reply to
@cman: I think the S&P500 comparison is just a relative function showing how the long/short funds compare. LS funds are suppose to capture equity gains but not loose as much. The caparison between
RGHVX to it's category is even more striking, kind of showing most long short funds suck.
RGHVX has captured 88% of equity gains the last 5 years, 57% of the losses
the category avg of LS funds has captured 38% of gains, 43% of losses.
Basically this shows the LS category is a losing proposition on average. Some funds, like
RGHVX stand out as winners. I like MFLDX also, actually my first choice, but couldn't buy it in my 401k. The Pimco fund I could do without.
The other thing I like about
RGHVX is that it is still very small. Also like the fact (i read somewhere) that most of the managers money and their families money is invested in this fund. Management commitment!
RGHVX I have a smidgen of RGHVX and I can't imagine why ANYONE would want to be like Bill Belicheat, although the "end justifies the means" crowd probably idolizes him, but he stole his first Superbowl victory by illegal means and paid a very low price, unless one considers respect worth something.
OTOH, the cost of insurance at 1.4%/yr (1.5 - 0.09) adds up, and some of us want to reduce the 2008 type losses primarily. If I paid 7% (1.4 x 5 yr - or select your own percent and interval and total cost versus an index), I'd like to be sure I had an absolute loss at least 15% less than the index. I'm not really sure how much the upside/downside capture gains in "normal" markets. Having read Bernstein's "The Investor's Manifesto" last week, I'm pretty depressed about all the ER's I've paid.