"The Optimal Use of Passive Management", Barra Newsletter, March/April 1993, p6
Topic: Investing (Investment Management) |
Asset Class: Equities
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Passive management is a useful tool for managing the style biases introduced by specialized active managers. For many plan sponsors, the S&P 500 is probably not the best choice for this purpose. Style index funds offer a superior alternative to the S&P 500. Choosing an appropriate amount of the total fund to put into passive vehicles and allocating among alternatives depends on the sponsor's level of risk aversion, among other things. The sponsor needs to understand the tradeoffs among the amount allocated to passive management, the style bias reduction, and the reduction in expected active return. Arbitrary constraints imposed on the allocations to individual portfolios can greatly impair the sponsor's ability to get the best possible results.
Publication:
Authors: BAKER Edward, NEWHOUSE Beth
"Battle of the Bonds: Intermediate vs. Long", Barra Newsletter, November/December 1991, p10
Topic: Investing (Investment Management) |
Asset Class: Fixed Income
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What is the appropriate passive benchmark or target for the fixed income portion of a pension fund? Long bonds don't seem to reward investors for the additional 'horizon' risk. Long bonds are an appropriate investment only when rates are expected to decline. The appropriate neutral position is to invest in intermediates; thus, the target portfolio or long-term benchmark should be intermediate, not long, bonds.
Publication:
Authors: BAKER Edward
"Market Segmentation and the New York Stock Exchange", Barra Newsletter, July/August 1991, p14
Topic: Investing (Investment Management) |
Asset Class: Equities
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A variety of off-exchange trading alternatives have sprung up in the last five years. The most widely used are POSIT and Instinet. Off-exchange trading may well erode the NYSE's market share. But are the new trading systems bad for market participants? We obviously don't think so. POSIT fills a market niche by facilitating confidential portfolio trading, and it is especially popular with passive and quantitative portfolio managers.
Publication:
Authors: BAKER Edward
