Hedge Fund

Portfolio Construction Framework

Overview

“What is the optimal portfolio?”  A question that has been discussed and debated since Harry Markowitz introduced modern portfolio theory (MPT) in his 1952 essay “Portfolio Selection.”  While practitioners continue to look for ways to improve upon MPT, the underlying concept of the efficient frontier remains a cornerstone in portfolio theory.  By using MPT, we can compare different portfolio configurations and see how adjusting for return and risk changes the allocation to each fund. 

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