Equity long/short funds generally exhibit which of the following?

Equity long/short funds are a type of hedge fund strategy that involves taking long positions in undervalued stocks while simultaneously taking short positions in overvalued stocks. This strategy aims to capitalize on the relative performance of these stocks while potentially reducing overall market risk.

The correct answer is that equity long/short funds exhibit similar mean returns and volatilities to the overall equity hedge fund index. This observation comes from the fact that equity long/short funds typically engage in strategies that are designed to deliver returns that are aligned with the broader equity market, but with an element of risk control through their short positions.

The performance of equity long/short funds often reflects the general trends in the equity markets. By having positions in both long and short securities, these funds can manage exposure to market movements and maintain a consistent return profile similar to that of other funds in the equity hedge fund index. This characteristic makes them a favored choice among investors looking for diversifiers within the equity space.

In contrast, the other options present characteristics that are not typically associated with equity long/short funds. Higher standard deviations compared to global equities suggest increased volatility, which is not a definitive trait of long/short strategies since their aim is to manage risk. As for high skew