Active Global Equities Structure
This chapter assumes that an investor has decided to be actively invested in global equities. The four key risks and issues that need to be addressed are listed next.
Although we deal specifically with an active global equities allocation, many of the issues also apply to a domestic equities allocation.
ACTIVE RISK AND RETURN
Active managers are paid to take views. These views may be on individual companies, countries, interest rates, or currencies. The aim in taking such views it to produce returns that exceed those generated by the market. As a result of taking views, the manager will have portfolio positions that differ from benchmark, or index, holdings. These different positions will result in the manager's performance differing from the benchmark. If the manager's views turn out to be correct, value ...