Click to login and read the full article.
Don’t have access? Click here to request a demo
Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600
Abstract
The proliferation of liquid, transparent, and inexpensive index-based implementation means that nearly all types of investors, individual and institutional, face a persistent portfolio implementation question regarding the allocation between active managers and index-based strategies.
Placing active risk from active fund management in the same framework of uncertainty that asset allocators utilize for other portfolio decisions brings to the active versus passive debate a surprising and enlightening answer that does not match typical discourse on the matter. Instead of a binary, “all or none” answer, reasonable (and even optimistic or pessimistic) expectations for active management imply a balanced implementation approach. Only extreme assumptions (e.g., very positive or negative levels of active return, very short or long time horizons) indicate a binary choice.
TOPICS: Mutual funds/passive investing/indexing, portfolio construction, equity portfolio management
- © 2014 Pageant Media Ltd
Don’t have access? Click here to request a demo
Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600