What are long-only funds?

Until a couple of months ago, the overall aspects of growth in terms of the economy and the capital markets were quite high, until the COVID-19 hit the economy world wide and the markets came crashing. Back then, it was clear that the investments in stock market could go through many frequent ups and downs, turning sharply in some major sectors too. This lesson remains valid even right now, with the economy slowly opening up. The long short funds in India or anywhere else in the world are actually and alternative to the investing.

The usual investment philosophies that were deemed to be a sure shot method of gaining returns did miss many targets that were set. So, what could risk takers do in such a situation? Well, they chose the long-short style of alternative investing.

With investments in the long short funds in India or anywhere else in the world, is the biggest strategy in hedge funds and 3^rd category of the AIF, that is, the Alternative Investment Fund. With the help of this strategy, the fund or asset manager expects to participate in and profits with the rise and fall we see in some stocks. In this long-only funds strategy, the said fund or the asset manager chooses to either take a buy position or goes long in the stocks we referred to before, that he or she thinks has the potential to go, and sells or goes short on stocks, without actually having the delivery in stocks which are high-priced with sole same of making a profit. It is important to remember that the asset managers can take the wrong decision and go in the wrong direction of the strategy or sometimes even while selecting the stock which can cause losses. Strategies like these can form a part of the process of asset allocations of the portfolio of investment on the basis of the volatility and concentration of risk in the funds.