A spectrum investing approach can improve information ratio

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Peak performance
Equity asset allocators have to juggle a number of objectives. Chief amongst them are the goals of generating superior after-cost relative returns and keeping relative risk low, two goals that are not entirely compatible. Many asset allocators try to address this concern with a so-called core-satellite approach, dividing their equity allocation into two main categories: The majority of the funds are invested passively to replicate broad market indices and achieve market returns at low relative risk and low cost. A smaller portion – the satellite – is invested in highly active strategies (HAR) with high relative risk and high expected outperformance.