According to a press release, the Extended Alpha Large Cap Core Strategy has the ability to overweight the most attractively ranked stocks by buying up to 130% of the total portfolio value. The additional 30% exposure to favored stocks is funded with proceeds raised by shorting securities considered to be overvalued.
“We believe that utilizing a limited amount of shorting significantly improves our opportunity to outperform the index in a consistent manner,” said Jocelin Reed, portfolio manager of the 130/30 strategy. “Now we can actually short these over-valued securities.”
Two other BNY Mellon Asset Management units, San Francisco-based Mellon Capital Management and Boston-based The Boston Company Asset Management, have launched 130/30 strategies since December 2006.
Additional information is available at www.bnymellon.com .