Smith Breeden Associates: The Equity Plus Fund (A) Harvard Case Solution & Analysis

In early 1997, Smith Breeden Associates, money management and consulting firm, was considering the future of Equity Plus Fund. Equity Plus Fund S & P index fund raised, who tried to beat S & P index by replicating the index using inexpensive derivative investment strategy and the remaining funds in the hedged portfolio of mortgage securities. The Fund performed well since the inception, with annual gross income is higher than the S & P Index. However, this performance has not resulted in significant growth of the Fund. With his performance record, Smith Breeden had several options. This fund may sell more aggressively, it can offer other sector funds, or it can create an extension fund index, based on the international stock market index. "Hide
by Alberto Moel, Robert K. Merton Source: Harvard Business School 25 pages. Publication Date: February 17, 1997. Prod. #: 297089-PDF-ENG

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