The Evolution of Equity Mandates in Institutional
Portfolios

Abstract

The asset allocation decision is one of the most important determinants of overall fund performance for institutions around the world. Pension funds, endowments, and foundations spend considerable time deciding how to split up the trillions of dollars they collectively control. Inevitably, the largest allocation is to the equity slice of the pie. The reasons are several: higher returns, largest asset class in which to invest, good liquidity, easiest to understand, and the cheapest to transact in. Anson traces the evolution of equity mandates as institutional investors have become more sophisticated in their approach to the equity markets including international investing, global mandates, Fama–French risk factors, and risk parity.