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B. G., Opalesque Geneva:

The benefits of market-neutral investing have become increasingly relevant amid heightened uncertainty and volatility, says a paper from BlackRock, a large asset manager. In recent decades, an abundance of central bank liquidity and low borrowing costs supported stable returns for most assets and suppressed security dispersion - or the degree of difference in performance across single securities. Now, macro volatility is creating a more dispersed market environment as individual companies differ in their ability to adapt to challenges like persistent inflation and higher interest rates.

Dispersion tends to be the highest when markets are volatile and uncertain. And equity return dispersion has lately risen above its historical average. As the previous 'rising tide lifts all boats' environment appears to have come to an end, the opportunity to take advantage of the relative return differences across securities makes a *market-neutral approach increasingly compelling.

Equity return dispersion has risen above its historical average Source

Furthermore, the degree of diversification that bonds can prov......................

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