The company said the three funds are based on the quantitative institutional strategies managed by New York Life Investment Management’s Equity Investors Group (EIG). The MainStay 130/30 Core Fund and the MainStay 130/30 Growth Fund will be available on June 29 while the MainStay 130/30 International Fund can be purchased starting August 31.
“We believe these three funds allow advisers to bring a deeper dimension to their client’s traditional equity style box. 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,” said Mike Coffey, managing director and head of distribution at MainStay Investments, in the announcement.
A 130/30 fund is an equity fund benchmarked to an index that invests 130% of its assets in long positions and 30% of its assets are sold short. The proceeds from the short sales are used to fund the purchase of the additional 30% of the long positions.
Through short selling and applying modest amounts of leverage, 130/30 strategies have the potential to generate higher information ratios than traditional active long-only strategies and may be able to achieve higher returns for the same amount of risk relative to the benchmark, according to the news release.
More information is at http://www.nylim.com/mainstayfunds .