In recent years, “130/30,” market neutral and similar strategies have become increasingly popular. In this report, Charlie Jacklin, president and CEO of Mellon Capital Management Corp., explains why removing investment constraints – the key feature shared by all such strategies --  can be highly desirable if implemented correctly. Jacklin notes:

• “Long only” and “domestic only” are the two most common constraints on traditional institutional portfolios.
• Investment constraints are common in traditional portfolios as a means to reduce risk, but can actually increase it.
• Investment constraints can introduce unintended biases, such as an overweighting of small cap stocks.
• Removing investment constraints can lead to more efficient portfolios that generate more return per unit of risk.

For more information or a hard copy please contact, please contact Charlie Jacklin at 415 546-6056.

The preceding information is based upon the analysis of historical performance of various asset classes and assumptions with respect to future economic conditions. Past performance is not an indication of future results. This information is not intended to provide specific advice, recommendations or projected returns of any particular MAM product.