CFAI Reading 23, Example 4, page 190

CFA Level III Equities
#1

The textbook says:

“Value and growth manager. Advantage: We would expect this choice to have lower tracking risk relative to the benchmark than investing in a single growth or value-oriented portfolio, because it does not make an overall style bet. It is a kind of barbell approach to achieving an overall market orientation, which may have the advantage of combining the expertise of two managers.”

(Institute 190)

What is it meant by barbell approach? I thought this concept pertained only to fixed income…

#2

They’re merely co-opting the language of fixed income (much like football announcers referring to a completed pass as “pitch and catch”).

All they mean is that if you have just a value strategy (a “bullet” approach: one investment) or just have a growth strategy (another bullet approach), you’ll likely have more tracking error than having a value and growth strategy (two investments: a barbell).