Investors typically expect long/short equity funds to dampen overall portfolio volatility, but many of these funds appear to be long-only funds masquerading as lower volatility vehicles. The varying investment strategies in the Morningstar Long/Short Equity category have led to wide performance dispersion and investor confusion. We believe investors may be taking unrealized risks by misinterpreting high returns as a success factor.
Many U.S. active equity managers have struggled during the past few years with market conditions that have made it difficult to outperform benchmarks. Yet, Alger believes that conditions for active management are improving and that portfolio managers will be more likely to outperform in the foreseeable future.
In this commentary, Alger CEO and CIO Dan Chung urges investors to maintain an optimistic view of equities. He explains that low interest rates, strengthening U.S. consumers, increasing use of the Internet, and other developments are likely to support equity gains this year.
"Our industry channel checks and homebuilder reports are showing solid consumer interest in housing." Alger Senior Industrials Analyst Alex Goldman discusses capital deployment, and the ongoing recovery in residential housing and non-residential construction.
Patrick Kelly discusses his views on Alger’s process, his outlook on the U.S. markets, and his thoughts on some stocks in the portfolios.
The global economy is not, as some might think, in a crisis. Liquidity provided by central banks combined with low interest rates may likely support equities in the foreseeable future. In this commentary, Economist Zachary Karabell addresses the relationship of the U.S. economy to other countries.