Enhanced active equity strategies, including 120–20 and 130–30 long–short portfolios, have become increasingly popular as managers and investors search for new ways to expand the alpha opportunities available from active management. But these strategies are not always well understood by the financial community. How do such strategies increase investors’ flexibility both to underweight and to overweight securities? How do they compare with market-neutral long–short strategies? Are they significantly riskier than traditional, long-only strategies because they use short positions and leverage? This article sheds light on some common myths regarding enhanced active equity strategies.

Author Information

Bruce I. Jacobs is a principal at Jacobs Levy Equity Management, Florham Park, New Jersey.

Kenneth N. Levy, CFA, is a principal at Jacobs Levy Equity Management, Florham Park, New Jersey.

Related Topics

Users who read this article also read


Rate and Share