is reasonably insensitive to different assumptions about manager information ratios and correlations. Given reasonable expectations based on historical experience, most investors can benefit from adding a healthy percentage of structured management to their active equity programs. SUMMARY We believe investors can achieve better results by including low-tracking-error structured managers (also known as enhanced-index or benchmark-sensitive managers) in their mix of managers. We call this approach the "spectrum strategy" because it allocates risk across the entire active risk spectrum. Historical analysis shows structured managers have generally achieved higher risk-adjusted returns (that is, information ratios) than traditional managers. We believe the relative performance advantage of structured managers is due to their focus on risk management and their relative freedom from the no-short constraint. Importantly, and perhaps surprisingly, given the expected information ratio advantage, we find that allocations to structured managers should come primarily from the plan's passive allocation rather than from traditional managers.