KIC000074 - INDEXING AND TRACKING ERROR o\YIofh)~ lDr\1c:l\Q4\~ Evaluation of Bond Portfolio Performance ~i The objective can determine what the

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INDEXING AND TRACKING ERROR Evaluation of Bond Portfolio Performance The objective can determine what the investment strategy will be. How do we evaluate a portfolio manager? After we discuss active strategies, we can see how to attribute the performance. What do we ultimately care about? S,\'lO. . r-rt-- How does the liability uncertainty impact this? How do hedge funds deal with liability uncertainty to take on risky strategies? What are some ways to measure risk adjusted returns? How are fees and costs of running the fund impacted by strategies? Active vs. Passive Indexing is a popular bond passive strategy. It is also popular for equity portfolio managers as well. The main motivation for lndexlng is to reduce the role of the manager and reduce fees for the fund. Theory says the best portfolio is the market portfolio and history shows that Its hard to beat the market consistently. Therefore,
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This note was uploaded on 09/06/2011 for the course FIN 428 taught by Professor Hood during the Fall '11 term at Iowa State.

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KIC000074 - INDEXING AND TRACKING ERROR o\YIofh)~ lDr\1c:l\Q4\~ Evaluation of Bond Portfolio Performance ~i The objective can determine what the

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