We don't want to make a value judgement about which is better other than to say that each will generate a different return pattern. The top-down approach approach tries to exploit buying (selling) cheap (rich) beta. The bottom-up approach is looking for alpha opportunities across a global set of markets.
The bottom up approach may have a macro view but will be looking for market dislocations or mis-pricings to exploit. A fall in energy prices may effect the Canadian banks. A rise in rates may have a big impact on levered loans. A macro theme may be identified but the manner the risk is taken is micro structured around specific controlled opportunities.The portfolio bets are combination of macro themes expressed through assets that may be mis-priced. The return to risk profile is sculpted and focused on specific opportunities.
The top-down manager is trying to exploit beta opportunities while the bottom-up manager is focused on finding or creating alpha opportunities across global markets. Put another way, the top-down manager is trying to exploit dynamic beta opportunities. By changing the risk profile of the portfolio, the manager expects to generate a higher return than a globally diversified portfolio.
There are risk premiums across global asset classes. The top-down manager tries to forecast the direction and relative value of these premiums because they they are time varying. The business cycle, the credit cycle, or liquidity cycle all change risk premium so an astute macro manager will change exposures to exploit these changes with higher compensation to risk. In the simplest form, this could be a trend-follower who is exploiting momentum across asset classes. A more sophisticated form will be using option strategies to change limit downside risk.