Alpha-beta seperation vs core satelite please, someone, multiple, between, difference

adehbone

I am having a hard time seeing a difference between these approaches when using multiple managers. Can someone please enlighten me?

mcmc

Alpha-Beta separation and core satellite are both ways of creating alpha for your portfolio.

1. Alpha-Beta separation. The alpha is generated from a long short portfolio (Beta Neutral), or a portfolio in which the manager has expertise. The Beta is created by investing in portfolio where you want the Beta exposure.
2. Core+ Satellite. The core is your portfolio which meets like the minimum return on investment (or matches your liabilities). Satellite portfolios are the ones that you add to generate alpha.

My two cents.

Roflnadal

BTON04 Wrote:
-------------------------------------------------------
> 1. Alpha-Beta separation. The alpha is generated from a long short portfolio (Beta
> Neutral), or a portfolio in which the manager has expertise. The Beta is created by
> investing in portfolio where you want the Beta exposure.

What's difference with long-short ?

ohai

AMC Wrote:
-------------------------------------------------------
> BTON04 Wrote:
> --------------------------------------------------
> -----
> > 1. Alpha-Beta separation. The alpha is
> generated from a long short portfolio (Beta
> > Neutral), or a portfolio in which the manager
> has expertise. The Beta is created by
> > investing in portfolio where you want the
> Beta exposure.
>
> What's difference with long-short ?


long-short is part of this strategy...

But I am with rstewart.. I don't see any difference between these strategies (alpha-beta v. core satellite)

IAmNeil

Long short portfolio - beta neutral (e.g. analyst is long on Ford Stock and Short on GM stock, the same trade can be structured to be Beta neutral).

infinitybenzo

Core+ Satellite do not use long-short, right ?

thommo77

Alpha beta separation is a "manager" concept. One way to do this is with a long-short fund, where you try to create alpha with no beta exposure.

Core satelite is a "sponsor" concept. For instance a pension fund manager that needs 40% allocation to domestic bonds chooses an index fund as the core, and active managers as the satelites.

dyga

I agree that Core-Satellite involves no short-selling... unlike alpha-beta separation.

Also with alpha-beta separation, you can mix & match β & α in way that's unavail. to long-only active mgrs.... a key distinction from core-satellite

I think it's easy to confuse the 2, because the concept of core-satellite sounds like separating "alpha" and "beta"... but really, the 2 strategies are very different

nannan66

So if do this..

invest 70% into the market index to get beta exposure only..
10% - i will let Active manager 1 to manage this portion of my money
20% - i will let Active manager 2 to manage this portion

Question1: can Active manager 1 have a long-short strategy?

Question2: Did I describe core-satellite approach?

bodhisattva

Don't you think Core+ Satellite is more similar to Completeness Fund ?