Fixed income benchmark getting, factors, primary, reading, matching

cjs238

Hi there,

I am getting increasingly frustrated with the fact that I am reading in some exam answers that enhanced indexing by matching primary risk factors and enhanced indexing by minor risk factor mismatches both aim to match the duration of the index, where as mis-match by larger risk factors is where the duration mis-match is done ....

I have read conflicting answers ..... can anyone clear this up???

cityboy

spot on panda.

mcmc

all enhance indexing = match portfolio duration

Active management with large mis-match= "Little" deviation of portfolio duration

Full blown active management= "Large" deviation of portfolio duration

hope this helps