Five of the Best: Long and short bets for high alpha

The managers of the Threadneedle Absolute Alpha fund, Mark Westwood and Chris Kinder, discuss five positions capable of adding alpha over the long term, in an environment where valuations look stretched.

The Threadneedle UK Absolute Alpha fund aims to provide a positive return over the long term via long and short equity positions. It has returned 6.7% over the year to 3 May, according to Morningstar. 1 Long: Persimmon Persimmon, the UK housebuilder, is seeing margins rise due to improved sales mix, cost control and a reduction in the cost of land. It is also benefiting from government support to the housebuilding sector which is helping modest volume growth improvement. In addition, a shareholder-friendly management team who have initiated a massive capital return programme are rew...