Long/short equity ETFs are a category with four years of history and very little market traction to date, but that may be changing. One fund in this category, ProShares Large Cap Core Plus (CSM) has leveraged strong recent performance to reach about $100 million in assets under management. Launched in July of 2009, the fund’s index ranks the 500 largest U.S. stocks using quantitative factors. It then overweights the top-ranked stocks by 30 percent of assets and goes short the lowest-ranked stocks with a 30 percent weight – thus replicating a 130/30 strategy. The fund returned 16.28 percent in 2012 and 7.17 percent in the first two months of 2013 to earn a Morningstar five-star rating.

For investors who prefer a strategy that balances long and short exposures equally, ProShares offers ProShares RAFI Long/Short ETF (RALS). The fund holds most of the 500 largest U.S. stocks either long or short, in approximately balanced weights. It returned 6.55 percent in the first two months of 2013.

The largest long/short equity ETF fund-of-funds, Accuvest Global Long Short (AGLS), uses quantitative rankings to go long on top-ranked country-specific ETFs and short on lower-ranked country ETFs. Even with a fairly high net expense ratio currently listed at 5.86 percent, the fund produced a 2012 return of 9.39 percent.