3 Market Neutral Funds to Counter Market Volatility
In a volatile stock market, investors usually focus on a long-term strategy, which keeps them protected from concurrent ups and downs. But that is easier said than done, and adding market-neutral funds to their portfolio often bails them out in terms of hedging their risk in the prevailing market conditions.
Market-neutral funds are designed to provide returns that are relatively unaffected by the state of the overall stock market. Adding these to the portfolio should boost returns and reduce risk. They typically deliver returns by combining long and short positions in various securities.
Below, we share with you three top-ranked market-neutral funds, viz., Victory Market Neutral Income Fund CBHAX, Gabelli ABC Fund (The) GABCX and Hussman Strategic Growth Fd HSGFX. Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of market neutral funds.
Victory Market Neutral Income Fund seeks to achieve its investment objective of high current income by implementing a proprietary, rules-based market-neutral investment strategy. CBHAX aims to generate income from its investments while maintaining a low correlation to the foreign and domestic equity and bond markets.
Victory Market Neutral Income Fund has three-year annualized returns of 1.5%. As of June 2022, CBHAX held 445 issues, with 10.3% of its assets invested in TOTAL OTHER.
Gabelli ABC Fund (The) typically invests in securities that provide attractive opportunities for appreciation or investment income. GABCX seeks to limit the excessive risk of capital loss by employing a varied investment strategy, including investing in value-oriented common stocks.
Gabelli ABC Fund (The) has three-year annualized returns of 2%. Mario J. Gabelli has been one of the fund managers of GABCX since 1993.
Hussman Strategic Growth Fd typically invests most of its assets in common stocks picked by investment advisors. HSGFX may use options and index futures, and other hedging strategies, to balance the fund’s exposure during unfavorable market conditions.
Hussman Strategic Growth Fd fund has three-year annualized returns of 7.9%. HSGFX has an expense ratio of 1.14% compared with the category average of 1.90%.
To view the Zacks Rank and the past performance of all market-neutralfunds, investors can click here to see the complete list of market neutral funds.
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