This is where a manager takes an equal position on both the short and long side thereby he will theoretically maintain a neutral exposure to the market.
A hedge fund investment strategy designed to exploit equity market inefficiencies. It usually involves being simultaneously long and short matched equity portfolios of the same size within a country. Market neutral portfolios are designed to be either beta or currency neutral, or both. Well designed portfolios typically control for industry, sector and market capitalisation.
An investment strategy that invests in both long positions and short positions, with equal dollar amounts. It attempts to neutralise market risk to achieve absolute returns.
An investment strategy where an equal dollar amount of securities are held both long and short. The portfolio thereby theoretically maintains a neutral exposure to the market. If longs selected are undervalued and shorts overvalued, there should be net benefit. There are many variations on this basic structure: dollar neutral or equal dollars long and short; sector neutral with balanced sector weightings on both sides, and beta neutral.
Funds employing this strategy structure portfolios with minimal market exposure by having the same dollar and beta-adjusted long and short exposure. Having little or no correlation to the marketplace, they are insulated ("neutralized") against the market ups and downs that otherwise determine much of a portfolio's return.
Equity market neutral is a hedge fund strategy that seeks to exploit investment opportunities unique to some specific group of stocks while maintaining a neutral exposure to broad groups of stocks defined for example by sector, industry, market capitalization, country or region.