A 130/30 fund is an equity fund benchmarked to an equity index that invests 130% of its assets in long positions and 30% short. The proceeds from the short sales account for the 30% additional assets in the long positions, for a net investment of 100% tied to the benchmark.
“Simply stated, 130/30 funds provide institutional investment strategies to investors in the form of a mutual fund,” said Stephen Fisher, president of MainStay Funds. “For those seeking the benefit of exposure to short equity positions, but in a measured, risk-controlled manner, 130/30 funds can provide that opportunity.”
Mike Coffey, managing director and head of distribution at MainStay Investments, added: “We believe these three funds allow advisers to bring a deeper dimension to their clients’ traditional equity style boxes. By helping to maximize the untapped potential of a client’s portfolio, 130/30 funds may be a useful adviser-driven vehicle that can help investors achieve their financial objectives.”
