The Good, Bad and Ugly of High Active Share

Patrick O’Shaughnessy, portfolio manager at O’Shaughnessy Asset Management and curator of the investment blog, The Investor Field Guide, explains that active share – a measure that shows how different a portfolio is from its preferred benchmark – helps measure the “potential” of a fund or strategy’s excess return. O’Shaughnessy runs a number of simulations that show the outperformance and underperformance potential of a portfolio with varying degrees of active share compared to the S&P 500.… Read More

Positioning for 2016

  Patrick O’Shaughnessy of O’Shaughnessy Asset Management says “if you look historically at what broad categories do well during period of rising rates . . . value stocks tend to do well.”  He notes that “this year has been the opposite story,” but with Fed rate increases widely anticipated, O’Shaughnessy says, “we would recommend that people re-position towards value stocks.” Andrew Slimmon of Morgan Stanely Investment Management says he anticipates stocks will do “modestly better”… Read More

Dividend Stocks Offering More Than Just Dividends

In his latest piece for NASDAQ.com, Validea CEO John Reese takes a look at some dividend stocks that also offer solid fundamentals. In the article, Reese looks at Patrick O’Shaughnessy’s latest research on dividend payers, which shows that high yielding stocks no longer trade at the discount to the market that they traditionally have. According to Reese, the fact that this valuation advantage no longer exists means that investors need to look much more closely at… Read More

OSAM: Microcaps A Better Opportunity Than PE

Over the past decade or so, investors — particularly institutional investors — have focused more and more on private equity as a way to get exposure to small, potentially high-growth companies. But in a recent research paper, O’Shaughnessy Asset Management’s Chris Meredith and Patrick O’Shaughnessy explain why microcap equities in many cases are a more attractive alternative to private equity.

OSAM on the Efficient Market Myth

While many believe that equity markets — particularly large-cap equity markets — are efficient, quantitative investing guru James O’Shaughnessy’s firm says the data shows otherwise. “Our research shows that, with the right strategy and the right discipline, the U.S. large cap market remains very inefficient and — by selecting stocks using historically proven themes — investors can outperform it by significant margins,” writes Patrick O’Shaughnessy in a new research report from O’Shaughnessy Asset Management. In… Read More

OSAM: How To Win In Emerging Markets

Emerging markets can make for enticing investments, and new research from James O’Shaughnessy’s firm shows how fundamental-focused investors can really take advantage of EM opportunities. “U.S. investors, and other investors around the world, tend to overweight their home country in their equity portfolio,” write O’Shaughnessy Asset Management’s Patrick O’Shaughnessy and Ashvin Viswanathan in a report available on the firm’s website. “By doing so, they miss out on considerable investment opportunities abroad.” They say that emerging… Read More

Active or Passive? Try (Parts of) Both

Should you choose actively managed funds for your investments, or passively managed funds? It’s one of the investing world’s great debates. And in a new research paper, James O’Shaughnessy’s firm says the answer is, perhaps you should use a little of both. Passive funds, Patrick O’Shaughnessy writes in the report, have three key advantages over active funds: lower fees, reliable strategy, and in some cases better tax management. But, he adds, they have a huge… Read More