Maximizing your plan's efficiency: risk budgeting: optimizing a portfolio through manager selection [2002 Global Investment Conference]

It is unfortunate that, to date, plan sponsors have received minimal direction with respect to manager structure. Many investors feel that added returns are possible and attainable by selecting active managers. When an investor hires an active manager, the plan sponsor is accepting the risk that the...

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Bibliographic Details
Published in:Canadian Investment Review 2002-07, Vol.15 (2), p.35
Main Author: Chinery, Bill
Format: Article
Language:English
Subjects:
Budgets
Index funds
Investment advisors
Investment policy
Portfolio management
Risk management
Online Access:Get full text
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Summary:It is unfortunate that, to date, plan sponsors have received minimal direction with respect to manager structure. Many investors feel that added returns are possible and attainable by selecting active managers. When an investor hires an active manager, the plan sponsor is accepting the risk that the active manager may not outperform the benchmark. The investor will need to identify either their risk aversion factor or (most likely) the absolute level of active risk they are willing to tolerate - the "risk budget."
ISSN:0840-6863