Deutsche Bank Likes Long / Short Strategies Amid Stimulus Uncertainity

With equity markets “well supported” at higher valuations, the current market environment for long / short fund managers that employ a fundamental research process is “very compelling,” according to a Deutsche Bank Asset & Wealth Management report.  When considering risks, the report noted that the withdrawal of stimulus is a wild card, an unpredictable event that might lead to favoring a long / short strategy as opposed to a long only approach.

Long / short strategies returns

Equity long / short strategies generate returns on both the long and short side of a portfolio, regardless of market direction, the report noted. The strategy has “historically offered higher risk...