Why is a disadvantage of holdings based analysis that it isn’t consistent with the method used by many managers to select securities? Seems to me like managers look at individual security attributes?? What am I not seeing here?
Ah ok thanks
Bump
Main Cons: Lots and lots of data points are needed. especially for large portfolios and methods between managers of calculating holdings style analysis may be different.
Pro: Lets you see the change in securities quickly unlike returns based analysis where style drift may not be picked up right away
Thanks Joe - I’m curious as to the original question in this thread. I agree with OP that I would think the manager does in fact select securities similarly to holdings based analysis. Is this not true, and why?
Cons: High costs, large amount of data needed. not consistent with the method used by many managers to select securities
High cost is almost always drawback of any term. You cannot miss. Lol!
I feel like you guys are trolling me at this point…
Again, could someone please shed light on the original post
mbjones pointed them out.
It won’t come up on the exam…but if I had to wager it’s because holdings based style analysis is essentially done retroactively on a portfolio to then classify them into value vs. growth, or by EPS or earnings volatility or industry representation.
Whereas the manager isn’t like consciously, “oh man i’m a value investor, better invest in some more utilities and financials”