PT  - JOURNAL ARTICLE
AU  - Brett H. Wander
TI  - What it Takes to Beat a Benchmark
AID  - 10.3905/joi.2003.319552
DP  - 2003 Aug 31
TA  - The Journal of Investing
PG  - 37--42
VI  - 12
IP  - 3
4099  - https://pm-research.com/content/12/3/37.short
4100  - https://pm-research.com/content/12/3/37.full
AB  - The relationship between a manager's level of skill and the actual value-added to a portfolio can be nebulous. Actual portfolio results are often only minimally correlated with the manager's skill level. A framework for quantifying the expected value-added of a constrained portfolio focuses on the three distinct factors that contribute to investment performance: a manager's forecasting skill ability to predict excess returns; the manager's range of opportunities to apply skill across securities and over time; the flexibility provided for a manager to express forecasting skill in a portfolio that is constrained to some degree.