We're using cookies, but you can turn them off in your browser settings. Otherwise, you are agreeing to our use of cookies. Learn more in our Privacy Policy

Bridge over ocean
1 May 2010 Financial Analysts Journal Volume 66, Issue 3

Another Look at Portfolio Optimization under Tracking-Error Constraints

  1. Philippe Bertrand

Research has shown that adding constraints to total portfolio volatility can substantially improve the performance of managed portfolios. Although other work has considered constant tracking-error volatility frontiers, in this study tracking error was allowed to vary but the risk aversion was fixed. The resulting optimal portfolios have several desirable properties.

Read the Complete Article in Financial Analysts Journal Financial Analysts Journal CFA Institute Member Content