Today on the show, we welcome Portfolio Manager Brett Dley as he discusses Fidelity’s Market Neutral Alternative Fund and why investors may consider long/short investing strategies. Some considerations include volatility protection as the fund aims to neutralize market volatility, providing stability in uncertain times for both equity and bonds. Brett adds the fund has a volatility that is a fifth of the equity market and a lower volatility than bonds. In addition, the pairing strategy of the fund implements a relative value investing strategy, taking a long position in stronger assets and short positions in weaker assets, achieving a net exposure of zero. Brett further explains that strategically taking a long position on a stock that is growing faster, has better margins and trades cheaper than the comparable stock. And whether the economy or market is good or bad, it has no bearing on the returns of the fund. As long as the long position goes up more or down less than the short-positioned stock.

Recorded November 8, 2023.

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