Barra Insight - Differences in US Economic Sectors

Nov 21, 2013

Sector risk models are useful tools to evaluate the risk and performance of sector-specific portfolios, because they are aligned with the investment universe. This alignment leads to risk and performance attribution that more accurately reflects the portfolio manager’s investment philosophy.

In the latest Barra Insight, we examine the risk and return dynamics of US economic sectors using the Barra US Sector Equity Models and compare the performance of sector-specific styles over time. The incorporation of sector-specific dynamics in the risk and performance attribution leads to more relevant analysis for the portfolio manager by providing specific insights to the stocks in the investment universe.