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Introducing our new portfolio review service for professionals
The vast majority of pensions funds, charities, endowments and other institutional portfolios have underperformed the market for decades. The way to stop the rot is to have an independent portfolio review, reduce fees and complexity, and increase diversification. From today, that’s precisely what TEBI is offering. As anyone who’s read The...
If only financial regulators could ditch the foxtrot
I call it the financial regulation foxtrot. Slow, slow, quick, quick, slow. They do nothing but talk, for years on end, about making asset management fairer and more transparent. Suddenly, as the UK’s Financial Conduct Authority did two years ago, they get all...
Higher conviction could exacerbate active managers’ problems
Hardly a day goes by without someone suggesting a cure for the ills of active fund management. Cutting fees seems the obvious solution to me if the industry wants to stem the flow of assets out of actively managed funds. Simply trading...
Elroy Dimson on the most important lesson from market history
The problem with getting to the truth about investing is that everyone in the industry has some sort of vested interest. I often find myself wondering how much better informed investors would be if, instead of always seeking the opinions of people with...
Active managers have biases too
So much is made of the cost advantage of low-cost indexing that there’s a danger of forgetting its behavioural advantage. Behavioural biases and natural human emotions are bad for returns, and as we’ve shown before, it’s harder for active investors to stay the...
Alfred Cowles III: Forecasters can’t forecast
I’ve noticed a tendency in the financial media to talk about the failure of active funds to outperform the market net of costs as if it’s something we’ve only recently discovered. In fact, for those who were prepared to look for it,...
Don’t be tempted to join the stampede
Traditionally, behavioural finance has focused on biases. Every propensity we have as investors to act irrationally has had a label attached to it — optimism, bias, recency bias, confirmation bias, and so on. But some behavioural scientists are starting to question whether the focus...