Test of true neutrality

Designed to be a lower-risk/lower-return category of hedge fund, the market neutral sector aims to give between 6% and 10% return a year with lower associated drawdowns. Charles McNally of Lyster Watson, says: "Unfortunately, a lot of long/short equity funds make no attempt to be market neutral, many end up being more market related than they believe. One of the issues is that market volatility and market level are not independent. While a lot of funds are neutral at the market level, some o