February/March 2014 Features Strategies: Asset Allocation Spotlight: Where to Be Active In Search of the Globe's Active Opportunities Valuation, fees and risk-adjusted returns can guide investors to attractive countries and sectors. 36 Where It Pays to Be an Active Fund-Picker 42 Liability-Relative Portfolio Optimization: A Historical Perspective Strategies: Portfolio Construction 45 Defending Against Rising Bond Yields Strategies: Investment Research 48 Drawing the Line of Asset Bloat 50 A Bull Market in Passive Investing 52 How a Company Increases Its Moat 54 Parsing Pension Liabilities Our study finds investors can have greater confidence in finding alpha-producing managers in some categories more than others. 39 Strategies: In Practice The Valuation Angle of Active Investing The wider the dispersion of equity valuations, the greater potential for outperformance. 56 Picking Funds in an Industry Crowded With Choice 3