Fidelity Investments announced the launch of the 130/30 Large Cap Fund to help quell the hunger of retail investors and advisors and to keep up with competitors.
The 130/30 strategy allows funds to take short positions and allow investors to borrow shares to sell under the expectation that they can be bought back later at a cheaper price. It also carries a higher risk, as shorting funds amplifies gains and losses.
Investors ... are expressing interest in funds that adopt institutional-like strategies for achieving attractive risk-adjusted returns," said Sanjiv Mirchandani, president of Fidelity Personal and Workplace Investing Growth Business.
Fidelity has a more than 15-year record in shorting via portfolios available to institutional clients," said Keith Quinton, who will manage the fund.