In the spring of 1997, Smith Breeden Associates, a money management and consulting company, thinking about the future of the Equity Plus Fund. The Equity Plus Fund was S & P index fund increased its attempts to exceed the S & P index by sampling the Index with low-cost derivative strategies and invest the remaining money in a hedged portfolio of mortgage-backed securities . The fund had performed since its inception, with an annualized total return of the S & P index. But this performanc … Read more »

In the spring of 1997, Smith Breeden Associates, a money management and consulting company, thinking about the future of the Equity Plus Fund. The Equity Plus Fund was S & P index fund increased its attempts to exceed the S & P index by sampling the Index with low-cost derivative strategies and invest the remaining money in a hedged portfolio of mortgage-backed securities . The fund had performed since its inception, with an annualized total return of the S & P index. However, this performance did not lead to a significant growth of the fund. With his track record, Smith Breeden had a number of options. It could be the fund market more aggressively, it could offer other sector-specific funds, or it could be the establishment of an enhanced index funds on the international stock market index.
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from
Alberto Moel,
Robert C. Merton
Source: Harvard Business School
25 pages.
Publication Date: Feb 17, 1997. Prod #: 297089-PDF-ENG
Smith Breeden Associates: The Equity Plus Fund (A) HBR case solution