Overview of Equity Portfolio Management

Free CFA Level III: Private Markets lesson in Portfolio Construction. 29 min read, ~4,299 words.

Passive replicates the benchmark at minimum tracking error and cost; active seeks alpha above the benchmark. Fundamental active: high IC, low breadth, concentrated. Quantitative: low IC, high breadth, diversified. The Fundamental Law of Active Management:; both paths can reach similar IRs, and TC falls below 1.0 when constraints block full...