APS believes in active management: Stock-pickers can add value in specific areas if they have demonstrated investment skill on a consistent, long-term basis and convictions as measured through high Active Share scores. However, stock pickers are hampered by portfolio management. The need for diversification and risk reduction means they cannot emphasize their convictions and need to find fillers to reduce tracking error and manage risk. APS believes in concentration and diversification: At the mandate level, investing in concentrated portfolios should enhance an active manager’s ability to add value. Diversification by manager, at the Strategy level, enables the aggregate Strategy to have a high correlation and moderate Tracking Error, while maintaining a very high Active Share score.