Portable Alpha And Pensions

Wed Jun 1, 2005


Why is portable alpha so popular with pension funds and how can those new to the sector pick the best alpha generator?

Mike Thomas, Russell Investment Group
For most investors, policy portfolios create constraints to investing whereby they only seek alpha up to the policy allocation to that particular asset class and that is as far as they go.

"You might choose a fund of funds...due to the importance of continually monitoring the waxing and waning alphas"

With portable alpha, we can remove those artificial constraints and now seek alpha wherever we can find it and use porting strategies to move the alpha around to get back to the policy allocation target. The result is a more efficient portfolio in aggregate. This is one of the reasons why portable alpha is so appealing to pension funds.

Niki Natarajan, InvestHedge
How would a pension fund new to portable alpha...

ISSN: 2151-1845 / CDC10004H

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