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From Kirsten Bischoff, Opalesque New York:

In his weekly outlook, BlackRock's Vice Chairman and Chief Equity Strategist Bob Doll pointed out that since March 2009, when the market bottomed, there have been three selloffs, each of a magnitude of around 10%; the first during the summer of 2009, the second in mid-Jan/Feb of 2010 and the third over the past few weeks. "Such market action is not abnormal in the midst of bull markets," Doll said.

These volatile swings in the equity markets may, in the end, work to the benefit of long/short equity hedge funds hoping to secure assets. Although many of these managers were criticized at the end of 2009 for only capturing a portion of the bull market rally that started in March of that year, their protection of assets during each pullback has served to strengthen the argument that hedge funds have a place in a broader portfolio.

Long/short hedge fund indices have reported positive estimated gains for April 2010 (ranging from +0.16% (CS/Tremont) to +1.1% (Greenwich Global Hedge Funds) to +1.43% (Hennessee)). While some would make the argument that hedge fund managers aren't capturing enough of the market rallies (the S&P 500 was up +1.48% in April) hedge fund managers will not soon forget investor fallout after poor performance in 2008. Asset protection has proven to be just as important as positive performance and thus far, hedge fund managers are wary of heightened risk.

"Hedge funds have underperfor......................

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