Karnosky-Singer Effects
- Tom Fahey (Unlicensed)
- Pamela Totas (Deactivated)
Effects measure the impact of the manager's actions. The following table describes each Karnosky-Singer effect.
Return | Formula | Description |
|---|---|---|
(Currency Weight − Weight Index) * (Segment Cash Return Fund − Total Cash Return Fund) | Measures the impact of overweighting or underweighting currency exposures in the portfolio relative to the benchmark. | |
(Weight Fund − Weight Index) * (Segment Local Market Return Premium Index − Total Local Market Return Premium Index) | Measures the impact of decisions to overweight or underweight particular asset segments relative to the benchmark. | |
Weight Fund * (Segment Local Return Fund * Segment Local Index Return) | Measures the impact of choosing securities within an asset segment that provide different returns from the benchmark. It evaluates the manager's skill in choosing better performing securities than those in the benchmark. | |
Currency Selection + Market Selection + Security Selection | The value added by active portfolio management. That is, the excess return. It is the sum of the currency selection, market selection, and security selection effects. |