Date updated:08-02-2008
Mutual funds that place bets against the market have been doing better than their long-only rivals. And the trend should continue, so long as the bear keeps its grip on stocks.

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CVSIX
Calamos Market Ne - $11.46
- +0.35%
- $N/A
The Calamos Market Neutral Income Fund (CVSIX), for example, pairs a company's convertible bonds with a short position in the stock. It also uses covered calls, which provide income -- although the downside is that the stock can be called away (bought) if it rises to a specified price. "Investors tend to use this fund as a way to stay in the market and be defensive," says John Calamos Sr., the fund's founder. Calamos Market Neutral is down about 3.6% this year, but still more than nine percentage points ahead of the S&P.

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ANDEX
Old Mutual Analyt - $9.03
- +0.56%
- $N/A
One fund the firm advises is the Old Mutual Analytic Defensive Equity (ANDEX), which does some shorting. (The fund has just been renamed Old Mutual Analytic.) De Silva wouldn't discuss any specific short positions. But as of June 30, the fund's short holdings included Mylan Laboratories (MYL), Leucadia National (LUK) and Louisiana-Pacific , among others, according to the fund's Website.

-
MYL
Mylan Inc. - $17.91
- +2.52%
- $17.55
One fund the firm advises is the Old Mutual Analytic Defensive Equity (ANDEX), which does some shorting. (The fund has just been renamed Old Mutual Analytic.) De Silva wouldn't discuss any specific short positions. But as of June 30, the fund's short holdings included Mylan Laboratories (MYL), Leucadia National (LUK) and Louisiana-Pacific , among others, according to the fund's Website.

-
LUK
Leucadia Natl Cp - $23.33
- +2.28%
- $22.99
One fund the firm advises is the Old Mutual Analytic Defensive Equity (ANDEX), which does some shorting. (The fund has just been renamed Old Mutual Analytic.) De Silva wouldn't discuss any specific short positions. But as of June 30, the fund's short holdings included Mylan Laboratories (MYL), Leucadia National (LUK) and Louisiana-Pacific , among others, according to the fund's Website.

-
MLSCX
Aberdeen Equity L - $7.84
- +0.64%
- $N/A
The Aberdeen Long Short Equity Fund (MLSCX) has about 40% of its portfolio in short positions. "That's relatively high for us," says Chris Baggini, the co-portfolio manager. "We're very mindful that stocks are down a lot" but "the fundamentals aren't supporting stocks, even at current levels." He cites weak profit growth as a key problem. Baggini wouldn't discuss current shorts, but the fund's Website says that, as of June 30, it was betting against Bank of America (BAC), Sprint Nextel (S), J.C. Penney (JCP), American Express (AXP) and Starbucks (SBUX), among others. The Bank of America, Penney and Sprint positions were recently closed.

-
BAC
Bk Of America Cp - $15.77
- +4.78%
- $15.29
The Aberdeen Long Short Equity Fund (MLSCX) has about 40% of its portfolio in short positions. "That's relatively high for us," says Chris Baggini, the co-portfolio manager. "We're very mindful that stocks are down a lot" but "the fundamentals aren't supporting stocks, even at current levels." He cites weak profit growth as a key problem. Baggini wouldn't discuss current shorts, but the fund's Website says that, as of June 30, it was betting against Bank of America (BAC), Sprint Nextel (S), J.C. Penney (JCP), American Express (AXP) and Starbucks (SBUX), among others. The Bank of America, Penney and Sprint positions were recently closed.

-
S
Sprint Nxtel Cp - $3.43
- +20.35%
- $2.92
The Aberdeen Long Short Equity Fund (MLSCX) has about 40% of its portfolio in short positions. "That's relatively high for us," says Chris Baggini, the co-portfolio manager. "We're very mindful that stocks are down a lot" but "the fundamentals aren't supporting stocks, even at current levels." He cites weak profit growth as a key problem. Baggini wouldn't discuss current shorts, but the fund's Website says that, as of June 30, it was betting against Bank of America (BAC), Sprint Nextel (S), J.C. Penney (JCP), American Express (AXP) and Starbucks (SBUX), among others. The Bank of America, Penney and Sprint positions were recently closed.

-
JCP
Penney J C Co Hol - $31.24
- +2.36%
- $30.89
The Aberdeen Long Short Equity Fund (MLSCX) has about 40% of its portfolio in short positions. "That's relatively high for us," says Chris Baggini, the co-portfolio manager. "We're very mindful that stocks are down a lot" but "the fundamentals aren't supporting stocks, even at current levels." He cites weak profit growth as a key problem. Baggini wouldn't discuss current shorts, but the fund's Website says that, as of June 30, it was betting against Bank of America (BAC), Sprint Nextel (S), J.C. Penney (JCP), American Express (AXP) and Starbucks (SBUX), among others. The Bank of America, Penney and Sprint positions were recently closed.
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