Investment Strategy Too Good to Be True? Take Closer Look.

A recent CFA Institute article tested a theory (shared by a large investment management firm) that a portfolio invested 51% in the S&P 500 could yield the same returns as one that is 100% invested in the index. “In other words, the strategy delivers the same portfolio return at only half the volatility.” The article notes: “At a time when market volatility exceeds 2008-2009 financial crisis levels, such a strategy has an understandable appeal. Given… Read More

What Investors Value in Managers

A new study from Chestnut Advisory Group shows that a fund manager’s ability to earn investor trust is more important than their track record, according to a recent article in Institutional Investor. Chestnut CEO and founder Amanda Tepper said, “Capital flows are all about people,” adding that investors are “not buying a risk-return stream, they are entering into a relationship with you.” According to the study, the top factors for investors when choosing an asset… Read More

Fund Managers: The Latest Might Not be the Greatest

The investing mantra that touts patience as the best strategy for successful investing extends to choosing, and evaluating, fund managers. Research conducted by Robert W. Baird & Co. provides evidence that even the top-performing money managers endure prolonged periods where they underperform their benchmarks and/or their peers. Further, the findings show that “shortsighted” investors who switch to new managers based on recent successes (over a period of 1 to 3 years) might “leave wealth on… Read More