Benchmark-driven investment strategy is an investment strategy where the target return is usually linked to an index or combination of indices of the sector or any other like S&P 500.[1]
With the Benchmarks approach the investor chooses an index of the market (benchmark). The goal of the fund manager is to try to beat the index performance-wise.
- The strategic asset allocation is usually delegated to the benchmark chosen[2]
- The asset managers stay concentrated to tactical asset allocation and fund (security) selection
- No volatility control over time[3]
- Without volatility constraints over a long period the investor is expected to get higher returns
See also
References
Further reading
- Hendry, John, et al. "Responsible ownership, shareholder value and the new shareholder activism." Competition & Change 11.3 (2007): 223-240.
- Ladekarl, Jeppe, and Sara Zervos. "Housekeeping and plumbing: the investability of emerging markets." Emerging Markets Review 5.3 (2004): 267-294.
- Leibowitz, Martin L., Simon Emrich, and Anthony Bova. "Modern Portfolio Management." (2008).