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Market Neutral Fund

Categories: Trading, Derivatives

See: Market Neutral.

A fund that is market neutral is almost by definition a hedge fund. Venture capital, private equity, and mutual funds are also, by definition, long-only funds. So they are really never market neutral funds.

Yes, a massively fast-growing, early stage, venture capital-backed start up can defy a horrible market. (Facebook and Zynga went up in value tons during the 2007-2009 bear market.) But most companies don't defy. They just...comply.

So..."market neutral" --> "hedge fund." They need to put that on a T-shirt somewhere.

Find other enlightening terms in Shmoop Finance Genius Bar(f)