oneboy

kurmanal Wrote:
-------------------------------------------------------
> So alpha-beta separation is a specific case of
> core-satellite approach. Would it be correct to
> state this way? or these are totally and
> completely different concepts? or should I just
> forget about these unimportant differences and
> take my online sample test?


Nope. Alpha beta separation is an asset management technique. Core satelite is an asset allocation technique at the "sponsor" level. So core-satelite has to do with how the sponsor allocates assets, tracking error, etc.

ABC hedge fund is a long short manager that buys undervalued equities and shorts over valued equities and maintains a beta of zero. - - - This is alpha beta separation

Ford Motor Company Pension Investment Committee allocates 50% of the small cap value portion of their portfolio to Vanguard Small Cap Index and the other 50% is allocated equally to 5 active small cap managers - - - This is core-satelite