Long-short funds hold fort, deliver 0.17% returns amid market rout

Sophisticated investment vehicles for the wealthy, which can reduce their downsides even when markets are falling, have outperformed regular funds which bet on rising markets.

Funds that only gain from rising markets are called long-only funds. Those which can also minimise losses or even benefit when markets are in decline are called long-short funds. These come under the category of alternative investment funds, which along with portfolio management service (PMS) service providers, manage investments for the very rich.

Long-only funds are down 5.85 per cent on a median basis over the last month, according to data from tracker PMS Bazaar.