No need to apologise, it’s not ignorance, just information. The pie chart takes positions by asset class and adds them together to show the net exposure to each asset class. The pie chart allows us to see “exposed” we are to a certain asset class- for instance if we’re only 0% net long we don’t really care all that the beta moves, but more about the relative returns.
The individual positions when added together in absolute terms add up to 100.
Thanks for the great commentary and analysis!
Sorry for my ignorance. Why the numbers on the pie chart never add up to 100%, even if I took the absolute value? Is the remaining percentage in cash?
No need to apologise, it’s not ignorance, just information. The pie chart takes positions by asset class and adds them together to show the net exposure to each asset class. The pie chart allows us to see “exposed” we are to a certain asset class- for instance if we’re only 0% net long we don’t really care all that the beta moves, but more about the relative returns.
The individual positions when added together in absolute terms add up to 100.
Thank you for the clarification! I appreciate it.