Say for example- if a manager is a growth manager( his stated style) and allocated 80% capital in growth stock in one of his client’s portfolios, but due to changes in the market condition, he reduces the allocation to 20%. Is this a style drift?
Possibly.
A lot depends on how long it’s maintained, and what’s allowable under the client’s IPS.
Could you please elaborate further with some good examples, as my exam is in 10 days? I have to clarify this concept. Thanks
If the IPS permitted a 20% holding to growth then there wasn’t a drift. If the Fund’s mandate said at least 50% or more must be in growth then possibly drift.
I would expect a drift question to be a bit more obvious - value manager but holdings show growth etc.