Northern Trust launches 130/30 strategy

Date: Wednesday, February 7, 2007
Author: Craig Sebastiano, Benefits Canada

Northern Trust Global Investments has launched a Quantitative 130/30 core equity strategy, which seeks to outperform the Russell 1000 Index.

The strategy has a goal of outperforming the index by 4% annually over a full market cycle and enables the portfolio manager to take short positions up to 30% and long positions up to 130%.

 “With this strategy, institutional investors get to capture the full benefit of our research capabilities while overcoming traditional long-only inefficiencies.”

The 130/30 strategy is designed to leverage the strategy’s alpha while maintaining 100% exposure to the market.

By relaxing the long constraint, the strategy can achieve higher alpha targets without sacrificing diversification or efficiency.