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The Short Answer

How Some Funds Give More Than 100% When It Comes to Asset Allocation

Long-short strategies and use of derivatives can push fund portfolios into exposure overdrive.

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Question: The portfolio breakdown for one of the funds I own shows it having more than 100% long U.S. stock exposure. How is that possible?

Answer: It can be somewhat jarring at first glance to see that a fund you own has more than 100% exposure to anything. After all, there's such a thing as being fully invested--but how can a fund be more than fully invested in a particular asset type?

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Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.