Drifters and Huggers

Callahan, Craig T.; Howard, C. Thomas
March 2007
Journal of Financial Planning;Mar2007, Vol. 20 Issue 3, p42
Academic Journal
The article discusses the equity management industry. The authors suggest that investments in equity managers that are "characteristic drifters," meaning that they change their investment strategies to keep up with market, are better than investments in "index huggers." Drifters perform better because they allow managers to pursue an equity style that is not hindered by restriction to a single characteristic box. In addition, drifters are free to take advantage of strong reversal effects in stock returns.


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