Tag: tracking error (Page 1 of 2)
We introduce the Frustrating Law of Active Management: For a strategy to outperform in the long run, it has to underperform in the short run.
When investors choose active managers, they introduce active risk into their portfolio, an extra risk that should be be accounted for in risk management.
Long-term outperformance and short-term underperformance are two sides of the same coin. The latter is necessary to achieve the former.
The rules of the game are crucial in politics. Investing is no different. Rules used for portfolio construction should match investor expectations.
Your Style-age May Vary
By Corey Hoffstein
On August 12, 2019