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 ...

a Overall both managers added value by mitigating the currency effects present in the Index Both exh ...

A U.S. pension plan hired two offshore firms to manage the non-U.S. equity portion of its total

Question:

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 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.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...