“We are invested with a Swedish manager who trades only earnings momentum, so basically they are completely market-neutral,” says Reisbol. “Their model is that they invest in stocks where consensus estimates are being upgraded. They short shares where earnings expectations are being downgraded.
“The most important thing when we pick a fund is that we understand what managers are doing. It must intuitively makes sense to us what they do.”
Click here to see part 1 of the interview, in which Frank Reisbol explains why he believes absolute return funds provide a false sense of security.