MFS Releases 130/30 Portfolio

July 16, 2007 ( - MFS Investment Management now offers a 130/30 portfolio with decisions to take long or short positions on U.S. stocks and expects to offer an international and global version of the portfolio later in the second half of the year.

According to a press release from the investment firm, the goal of the 130/30 portfolio is to outperform the S&P 500.

The portfolio seeks to provide excess return by taking short positions in stocks with a value equal to 30% of the portfolio, and then proceeds from the short sales are used to invest 130% of the portfolio in long positions.

“The ability to take short positions greatly expands the portfolio manager’s opportunity set,” said Matthew Krummell, lead portfolio manager of the MFS Blended Research 130/30 portfolio, in the press release. “Long-only managers can underweight a stock they consider unattractive, but because there are a limited number of stocks that have a significant weight in the benchmark, it is difficult for those managers to realize a significant impact from that strategy.   The ability to short unattractive stocks gives a manager much more flexibility.”

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