long-short fund business definition

An investment company that attempts to profit both from long positions in financial assets it considers undervalued and short positions in financial assets it feels are overvalued. For example, a fund may have long positions in stocks of energy companies and short positions in the stocks of financial institutions. Wise investment decisions by a long-short fund portfolio manager will result in the fund's shareholders making money in both up and down markets. Market-neutral funds are a type of long-short fund, but with relatively equal values of long and short positions. See also market-neutral fund.