"Applying Style Analysis to Mutual Fund Selection", Barra Newsletter, Winter 1995, p 5
Topic: Investing (Investment Management) |
Asset Class: Multi-Asset Class
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Controlling for both style and volatility reveals the greatest insight to the mutual fund investor. An investor who selects mutual funds in this manner retains control over the style mix of his or her aggregate portfolio, just as the institutional plan sponsor does by blending the custom benchmarks of the managers hired. In both cases any incremental value added by the fund manager drops through to the bottom line of the aggregate portfolio. There is another important similarity between individual and institutional fund selection: in both cases identifying the winners in advance is very hard. Despite the sobering odds, this article will compare four methods of ranking mutual funds.
Publication:
Authors: DOERSCH Todd
