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.”
For more information visit https://www.mfs.com/wps/portal/!ut/p/.cmd/MfsUniversalStart .