Investor Breadth (IB)

CFA Level III Equities
#1

Sch Bk 3, PG 146

It says ’ IB measures the number of indepdent decision an investor makes, which does not necesarily increase with the number of securities followed. For examples, if an investor buys ten energy stocks bceause she thins the sector will do well, then the IB equals one not ten.’

I have understood the above example (which is simple in my opinion), can anyone in the forum share with me their experiences of answering question on the above topic, where it needs to apply the subject in a more tricker situation.

Thank you

#2

I came across one example that can relate to this - long-only (equity hedged) portfolios have lower breadth that long-short (eguity neutral) portfolios. So, for example if you have alpha-beta separated portfolio it will automatically have higher IB than no-seprated portfolio, because of the alpha part.