offered by proximity to the information flows in the portfolio. Regardless of who manages the completion program, liquid futures and forwards are critical in reducing the transaction costs of rebalancing. Part 2: Pure Overlay As described in the introduction to the chapter, the pure overlay element of a GTAA program is designed to generate excess returns through intentional active deviations in sectors, countries, or asset classes. Generally, a GTAA strategy can be viewed as making two major types of decisions: 1.    Asset class timing (includes stocks versus bonds versus cash, small-cap versus large-cap stocks, value versus growth stocks, emerging versus developed stocks and bonds, credit timing, etc.). Often, this type of decision is referred to as TAA. 2.    Country or sector decisions within asset classes (includes country selection in developed and emerging equity, fixed income and currency markets, as well as the potential for sectors within equity markets, and maturity within fixed income markets). These are the global relative-value decisions that give meaning to the "G" in GTAA. The relative importance of these two types of decisions is a critical feature of a well-managed GTAA program. Whereas the traditional TAA programs focused exclusively on the first type of decision, GTAA's ability to add value derives primarily from the second type of decision. The most successful, modern GTAA strategies predominate their risk in the latter, primarily country-selection decisions. Because country-selection strategies potentially trade in many more securities than asset class timing alone, we expect a higher risk-adjusted return from them. In the nomenclature of Grinold's (1989) "Fundamental Law of Active Management," there is greater breadth in the country-selection strategy.8 Breadth is the number of independent assets in the investment opportunity set. Of course, a strong information coefficient-the predictability of the assets in the strategy-can offset a loss of breadth. As we demonstrate later, the empirical evidence actually finds a lower forecasting ability in the time series of asset class returns as compared to the relative value of country returns, further raising the importance of the country-selection decision in GTAA. The most common implementation of GTAA today uses all the liquid equity index futures, bond futures, and currency forwards in developed markets globally deployed in four different strategies: (1) TAA among global stocks, bonds, and cash; (2) country selection within global stock markets; (3) country selection within global bond markets; and (4) currency selection within global currency markets. 8Grinold, Richard C, 1989, "The Fundamental Law of Active Management," Journal of Portfolio Management 15, 30-37.