A U.S. pension plan hired two offshore firms to manage the non-U.S. equity portion of its total portfolio. Each firm was free to own stocks in any country market included in Morgan Stanley/Capital International's Europe, Australia, and Far East Index (EAFE), and free to use any form of dollar and/or non-dollar cash or bonds as an equity substitute or reserve. After three years had elapsed, the records of the managers and the EAFE Index were as follows:

You are a member of the plan sponsor's Pension Committee, which will soon meet with the plan's consultant to review manager performance. In preparation for this meeting, you go through the following analysis:
a. Briefly describe the strengths and weaknesses of each manager, relative to the EAFE Index data.
b. Briefly explain the meaning of the data in the "Currency"column.

  • CreatedDecember 17, 2014
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