Construct · 1 fields · 1 citations

fundamental law of active management: a standalone construct

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Finance

relation stating that an active manager's information ratio approximately equals skill per forecast times the square root of the number of independent bets.

In finance, fundamental law of active management refers to relation stating that an active manager's information ratio approximately equals skill per forecast times the square root of the number of independent bets. This meaning comes from Grinold (1989) in The Journal of Portfolio Management.[1]

Unit
Recovery means
Measured by

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Nearby constructs

information4 fields · 5 citationsjingle · one word, four constructs number3 fields · 6 citationsjingle · one word, three constructs portfolio3 fields · 3 citationsjingle · one word, three constructs

References

Grinold, R. C. (1989). The fundamental law of active management. The Journal of Portfolio Management, 15(3), 30-37. https://doi.org/10.3905/jpm.1989.409211

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