Creating Quantitative Active Management Strategies
The quantitative active investment strategy has a well-defined process: Define the market opportunity. Acquire and process data. Back-test the strategy. …
CFA
Creating Fundamental Active Management Strategies
The broad goal of active management is to outperform a selected benchmark on a risk-adjusted basis, net of fees and …
Top Down Strategies
Top-Down Strategies Top-down strategies use an investment process that begins at a top or macro level. Instead of focusing on …
Bottom Up Strategies
Bottom Up Strategies Bottom-up strategies begin the asset selection process with data at the individual asset and company level, such …
Tracking Error Management
Tracking error and excess return are two measures that enable investors to differentiate performance among passive portfolio managers. Tracking error …
Portfolio Construction
Full Replication Full replication in index investing occurs when a manager holds all securities represented by the index in weightings …
Approaches to Passive Equity Investing
Pooled Investments Pooled investments include open-end mutual funds and ETFs. Pooled investments are the most convenient approach for the average investor …
Herfindahl-Hirschman index (HHI)
Stock concentration is a key concern in the selection of the appropriate index. An index that has a high degree of …
Equity Investment Universe
Size and Style A popular approach to segmenting the equity universe incorporates two factors: (1) size and (2) style. Size …
Client Considerations for Equity Portfolios
Wealth managers and financial advisers often consider the following investment objectives and constraints when deciding to include equities in a …