Market neutral investing

Document description

This paper aims to introduce the concept of market-neutral investing and discusses the similarities as well as differences between the market neutral investing style and the traditional long only investment style. We demonstrate the additional flexibility provided by market-neutral investing. We consider market neutral style as an asset class (with a cash benchmark as an absolute return product) as well as an overlay strategy (with the benchmark determined by the investor). In addition to theoretical considerations we highlight the practical issues in implementing such strategies.