Northern Trust Global Investments is the latest manager to launch a 130/30 strategy. The core U.S. equity product is designed to outperform the Russell 1000 index by four percentage points a year over a market cycle. The strategy will be able to take short positions up to 30% of assets and long positions up to 130%.
The 130/30 strategies are geared to deliver higher alphas by relaxing the long constraint while keeping a 100% exposure to the market.
Jeremy Baskin, senior vice president and global head of quantitative active strategies, said that an unnamed corporate pension fund has invested $25 million in the core U.S. strategy. He added that NTGI plans to launch a 130/30 strategy based on the Morgan Stanley Capital International Europe Australasia Far East index late in the second quarter or early in the third quarter. A global product, based on the MSCI World index, also is in the works.