Threadneedle launches 130/30 strategy fund

Threadneedle has launched the first fund in its 130/30 strategy range, the Threadneedle American Extended Alpha Fund, to be managed by US equities fund manager, Stephen Moore.

The new range of 130/ 30 strategies is an extension of the Threadneedle higher alpha, long-only capability which is characterised by a fundamental, stock picking approach.

Customers will be able to benefit from all Threadneedle investment insights, both positive and negative, as 130/30 funds enable managers with UCITS III derivative capabilities to implement more meaningful negative positions in unattractive stocks.

The Threadneedle American Extended Alpha Fund will provide an exposure that maximises the investment potential of stock markets through both long and short positions. It is a traditional long-only portfolio of primarily North American equities enhanced with a short exposure to unattractive stocks set at around 30% of the value of the fund. This additional short position is offset by additional long positions in attractive companies, thereby raising the long exposure to around 130%. The overall net exposure to the stock market will therefore remain around 100% with a higher information ratio – more alpha than a traditional long-only portfolio but for a similar amount of market risk.

Threadneedle’s experienced 9-strong North American equity desk is one of the largest teams entirely based in London and manages a total of $US 9.9 billion in hedge and long-only assets. As part of the North American equity team, Stephen Moore manages $US 3.01 billion in assets. (Assets under management data as at end of September 2007.)

Stephen Moore joined Threadneedle in 2002 as a US equity fund manager. Stephen began his career at First State Fund Managers and has 10 years experience managing American equities.

David Gasparro, Head of Distribution at Threadneedle commented: “We’ve listened carefully to our customers and delivered what they want, an aggressive long-only fund. We’re proud to be one of the first European houses to run a fundamental 130/30 strategy fund. It’s a perfect leverage of our established and thriving hedge fund business. It also makes sense to start our range with the American equity desk because of the successful three-year track record of the US hedge fund and the longer term track records of our US long-only funds.”

Stephen Moore, manager of the Threadneedle American Extended Alpha Fund: “ With my fundamental approach to stockpicking, I am focusing on companies that can sustain or increase free cash flow generation and are allocating capital effectively. Although we are confident the American market can make progress, choppy market conditions are likely to remain a feature and I expect this to present an excellent opportunity set for my long and short books.”