Making Portable Alpha Pay Off
Jul 4th, 2006 | Filed under: Portable Alpha & Alpha/Beta SeparationBy: Mellon Capital Management
Published:
The concept of portable alpha is gaining widespread acceptance among institutional investors as a cost-effective way to improve returns, manage risk and adjust portfolio exposures. While portable alpha has been a mainstream practice for many years – mostly through enhanced indexing strategies – the opportunities today are more sophisticated and diverse. Plans sponsors can unbundle virtually any traditional, fully funded position into alpha and beta components and meet policy objectives with unprecedented flexibility, economy and precision.
In this report, Mellon Capital Management offers three case studies in how portable alpha strategies may be implemented, providing efficient, cost-effective approaches to increase expected returns and improve diversification.”
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