This strategy, which changes the existing assignment of Aronson+Johnson+Ortiz to a 130/30 strategy, is intended to provide upside return potential without significantly increasing risk at the total fund level, according to a Russell news release.
A limited long/short strategy allows money managers more
freedom to apply their stock selection skills regarding
both stocks they consider will outperform and those that
they consider will underperform. Long/short strategies
allow a quantitative manager to short individual stocks and
invest the short sale proceeds in additional long share
purchases, diversifying risk, Russell said.
“As financial professionals seek investment innovations for clients, they want to maintain a holistic view – evaluating quality, managing risk and assessing the impact on the total portfolio,” said Tim Noonan, managing director, Russell Investment Group, in the news release.
Russell said it will hold more than $5.3 billion in limited long/short strategies in its funds, and is among the largest purchasers of these strategies in the world, based on research conducted by Russell’s manager research team.
The latest addition of the 130/30 long/short strategy follows the August 2006 addition of another limited long/short approach, a 120/20 portfolio, the company said.