2017 – L/S Equity Delivers As Leverage Hits All Time High

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2017 – L/S Equity Delivers As Leverage Hits All Time High

With all major asset classes up year-end, market expectations for 2017 were far exceeded from market participants across the globe. Leading the pack was Long/ Short (L/S) Equity funds – reporting a performance of up 12.3% year to date into November.Recent research from Morgan Stanley Prime Brokerage unit indicated that the median net return into November for Equity L/S funds was +10.0%, with an average return of 12.3%. This has been a welcome return to double digit territory – with only lacklustre performance to be had since 2013. In addition, the research indicates that the capture ratio gained significant ground in 2017, reaching 55%. (Capture Ratio: L/S returns expressed as a proportion of MSCI AC World Index returns).1