element, 455, 458-459, 467 purpose of, 455 size requirements, 468-469 theoretical explanations for, 459-461 using forwards, 470, 472 using futures, 470-472 Goal-setting, in risk plan, 253 Goetzmann, Will, 46 Goldman Sachs Asset Management (GSAM): green zone, 270-272, 432 portfolio analysis and construction environment (PACE), 262, 264-267, 293, 298, 304-306, 310-311,391-392 red zone, 432-433 yellow zone, 432-433 Goldman Sachs Commodities Index, 103 Gordon growth model, 45 Government bonds, 45, 73, 98-99, 344,436,546-548,565 Graham, Benjamin, 416, 434, 456 Grantor trust, 566-568, 570, 574-575, 587 Great Depression, 555 Green Sheet, 217-222, 272 Green zone events, 214, 216, 222, 270-273,432-433 Grinold's Law, 458, 463-464 Gross domestic product (GDP), 46, 48, 93 Group weight, 307, 326 Growth factors, 436 Growth managers, 197, 213 Growth rate, 344 G-7, currency hedging, 147 Habit persistence, 52 Half-life, 236, 241,243, 503 Heartland: High Yield Muni Bond, 292 Short Duration High Yield Mini, 292 Hedgefund.net, 504 Hedge Fund Research (HFR), 486 Hedge funds: allocation development, 489-490 characteristics of, generally, 78, 103-105, 153, 286-287, 444, 502-504, 565 classifications, 505 evaluation framework, 488^489 fee structure, 503 funds of, 515 hurdle rate evaluation, 488, 494-500 implementing allocations, 490-494 information resources, 486-488, 504 investment strategy, 506 investment universe, 504-505 leverage, 487 management characteristics, 484-486 managerial style, 506 monitoring, 514 organizational structure, 507-508 overview, 501-502 people involved, 507 portfolio construction, 510-513 portfolio management, 501-515 potential advantages of, 483-486, 499 self-re porting biases, 486^488 track record, 508-510 Hedging, 28, 56y 73,112, 474 He Id-to-maturity portfolios, 436 Hennessee, 486 High-yield bond index, 338, 344 High-yield bonds, 438, 445 High-yield markets, 217 Hindsight bias, 418 Historical data: active risk management, 193-195, 200,208-210 covariance matrix estimation, 247 currency hedging, 147 optimal risk budget, 177-178, 181-183, 188 significance of, 30, 107, 109 Historical simulations, 265, 269, 413 Historical volatility, 31, 350, 438 Historic returns, 12, 546-550 Holding periods, 547-548, 558, 560, 582