Equities: Still lagging


With a burst of upward momentum in October, long/short equity funds have now outpaced their 2005 performance. But overall, these portfolios still lag the net returns of broader markets.

A rally in large-cap equities, spurred by a number of S&P500 companies that beat earnings expectations, boosted the performance of many long/short portfolios. Only continued caution has kept funds from logging bigger gains via concentrated positions or leverage.

The Absolute Return U.S. Equity Index gained a median 1.95% in October to total 8.81% YTD. That remains behind the S&P 500 total net return of 3.23% for October, and the