130/30 Mutual Fund
Definition of '130/30 Mutual Fund'A mutual fund that has long positions and short positions in its portfolio. Specifically, in a 130/30 mutual fund, the fund is long 100\% of its assets, and in addition it shorts 30\% of the value portfolio and uses the cash received in the short sale to invest long in more assets. So in total, the fund is 130\% in the long portfolio and 30\% in the short portfolio, hence 130/30. |
|
Investopedia explains '130/30 Mutual Fund'For example, if the fund is worth $100, it would invest the $100 in equity and then would short $30 worth of equity. In a short sale, the fund receives $30 cash and uses that $30 to invest long in more assets. So the fund is now long $130 and short $30. This is a popular strategy because it allows the manager to invest $160 for every $100 the investor puts into the fund. |
|
Related Definitions
Articles Of Interest
-
4 Strategies For Managing A Portfolio Of Mutual Funds
Discover some common strategies to devise a plan and maintain your holdings to reflect it. -
Introduction To Investment Diversification
Reducing risk and increasing returns in your portfolio is all about finding the right balance. -
How To Pick A Good Mutual Fund
Learn how to evaluate mutual funds and find the right one for you. -
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. -
An Introduction To Mutual Funds
Mutual funds are the starting point for many individual investors because they offer a balanced portfolio in a single investment. Find out how mutual funds work and whether they are the investment ... -
The Dangers Of Over-Diversifying Your Portfolio
If you diversify too much, you might not lose much, but you won't gain much either. -
How To Cut Your Mutual Fund Fees By Up To 90%
Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ... -
Beware Of The Mutual Fund Performance Trap
Want to own a mutual fund that will double its reported return in the next six months? Chances are, you already do. Every equity mutual fund on the planet is about to report a big jump in ... -
Using ETFs To Replace Your Expensive Mutual Funds
Fees associated with many mutual funds looks small. Some are barely over 1% or even lower. But over time those fees erode the overall value of your portfolio. And even in the near term, as in ... -
The Hidden Fees In 401(k)s
Learn about the conspicuously disclosed fees that lurk within your 401(k) investments.
Free Annual Reports