Build Better Portfolios Using Capture Ratio
Capture ratio can help you create a portfolio that can aid in building capital more consistently over long periods of time. Keep in mind that capture ratio is based on the rate of return achieved relative to the market. As a result, instead of looking solely at return, as most investors do, capture ratio is one of the only statistics that is outcome oriented. In the future, resist the urge to employ the manager with the highest return and focus on building a portfolio that will achieve your investment goals using capture ratio.
Matt Schreiber is Vice President of Investments at WBI Investments and a Senior Investment Committee Member. WBI Investments manages $1.4 billion in absolute return strategies for income and growth.
