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