- 130-30 Strategy
- A strategy that uses financial leverage by shorting poor performing stocks and purchasing shares that are expected to have high returns. A 130-30 ratio implies shorting stocks up to 30% of the portfolio value and then using the funds to take a long position in the stocks the investor feels will outperform the market. Often, investors will mimic an index such as the S&P 500 when choosing stocks for this strategy.
To engage in a 130-30 strategy, an investment manager could rank the stocks used in the S&P 500 from best to worse on expected return, as signaled by past performance. From the best ranking stocks, the manager would invest 100% of the portfolio's value and short sell the bottom ranking stocks, up to 30% of the portfolio's value. The cash earned from the short sales would be reinvested into top-ranking stocks, allowing for greater diversification in the higher ranks.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
130-30 fund — A 130 30 fund or a ratio up to 150/50 is a type of collective investment vehicle, often a type of specialty mutual fund, but which allows the fund manager simultaneously to hold both long and short positions on different equities in the fund. [… … Wikipedia
Strategy & Tactics — ( S T ) is a wargaming magazine now published by Decision Games, notable for its groundbreaking move of publishing a complete new wargame in each issue. Beginnings Strategy Tactics began life in 1966 as a wargaming fanzine published by Chris… … Wikipedia
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… … Investment dictionary
Viet Cong and PAVN strategy, organization and structure — US caricature of Ho Chi Minh During the Second Indochina War, better known as the Vietnam War, a distinctive land warfare strategy and organization was used by the Main Force of the People s Liberation Armed Forces (better known as the Viet Cong… … Wikipedia
Evaluation strategy — Evaluation strategies Strict evaluation Applicative order Call by value Call by reference Call by sharing Call by copy restore Non strict evaluation Normal order Call by name Call by need/Lazy evaluation … Wikipedia
Wedge strategy — The Wedge strategy is a political and social action plan authored by the Discovery Institute, the hub of the intelligent design movement. The strategy was put forth in a Discovery Institute manifesto known as the Wedge Document , [… … Wikipedia
Lockheed AC-130 — Infobox Aircraft name = AC 130 Spectre/Spooky type = Fixed wing gunship manufacturer = Lockheed and Boeing caption = AC 130H Spectre gunship jettisons flares in 2007 designer = first flight = AC 130A: avyear|1966 AC 130U: avyear|1990 introduction … Wikipedia
seduction — by Marcus A. Doel Seduction plays a pivotal role in Baudrillard s conceptual universe and theoretical practice. It is a signature concept even though he is much better known for his take on hyper realism, postmodernism, and simulation. Yet… … The Baudrillard dictionary
Counterterrorism — Russia has a well developed counterterrorism program, which grew out of late Soviet era operations directed at minority nationalist and counterrevolutionary organizations. While terrorist attacks under the totalitarian regime were rare, the… … Historical Dictionary of the Russian Federation
Portable alpha — is an investment management term which refers to the return of an investment manager who has intentionally and completely eliminated his market risk, or beta. The return of such a portfolio will only represent the manager s skill in selecting… … Wikipedia