Trading Activity Return

CFA Level III Portfolio Management
#1

Whe we see a list of things describing performance

Interest Rate management effect - yield positioning, duration management, etc

other management Effects - Security selection, sector selection, etc…

and “trading activity return”

What is “trading activity return”?

#2

It’s probably the attribution to the Transaction costs (Plug number)

#3

transaction costs are part of other management effects already.

trading costs are outside. It is the Total Portfolio Return - Sum(All other effects) plug number - as L3Crucifier says. It is the impact of Sales / Purchases on Total Portfolio Return.

  • but the two are different. In the table presented in the book Transaction Costs are 0, but Trading Costs for the two managers are different.
#4

So that is just a filler? Im asking becasue i dont want to get poked in the eye by some comparative question where one manager made his money on 'trading activity"

#5

As described on P169(bottom), it captures the effect of buy/sell of bonds over the period. As you said, it’s just a plug number.