Financial Times FT.com

Cheap provider of beta is under-used

By Steve Johnson

Published: November 5 2007 02:00 | Last updated: November 5 2007 02:00

Exchange traded funds are potentially a godsend to fund managers and institutional investors engaged in the increasingly common practice of "core and satellite" investing.

Such an approach typically, although not always, involves securing cheap market return, or beta, in the core portfolio, then using the satellite operations to chase alpha, or above-market returns.

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