Long/short funds are often subsumed into the hedged equity category. That’s a serious taxonomic goof. In reality, there may be very little hedge value in such portfolios. We re-learned learned this lesson in the recent selloff when the S&P Volatility Index (VIX) nearly doubled overnight.

Long/short portfolios seek to exploit performance disparities between the stocks bought and those sold. If you consider their beta coefficients, you’d see that these funds typically maintain a net long exposure to the market. Beta may be attenuated, but it’s still long. These funds, by and large, aren’t market-neutral.

Let me explain …

There are 38 products – mutual funds and exchange-traded – readily identifiable as long/short strategies, worth about $19.8 billion. Here’s how they fared over the last month:

Market Weighted Performance (3-Aug-15 through 3-Sep-15)

What can we glean from these numbers? Well, first and foremost, how much the long/short portfolios are driven by the broad equity market. Just look at the r-squared (r²) coefficient. Fully 87 percent of long/short funds’ price movements can be explained by variations in the S&P 500.

It’s the degree of price movement that’s different. With a collective beta around 42, long/short products are “less long,” rather than “not long.”

Now look at the alpha coefficient. For their effort, long/short products managed to outperform, to a small degree, the broad market. If there was anything neutral about these products, it was their market-weighted Sharpe ratio for the period – 0.00 — versus -0.25 for the S&P 500.

These are market-weighted numbers, so they’re skewed toward the performance of category behemoths Boston Partners Long/Short Research Institutional Fund (OTC: BPIRX) and the Diamond Hill Long/Short “A” Fund (OTC: DIAMX) which together take up 57 percent of the category’s real estate.