In October 2017, the Wall Street Journal published an article largely critical of Morningstar’s Star-Rating system. The now infamous piece, “The Morningstar Mirage”, was well researched and written by seasoned journalists Kirsten Grind, Tom McGinty and Sarah Krouse. Its main... more »
November 25, 2019 This weekend we launched a redesigned website with some important changes. Let me first describe the changes and then discuss the motivation behind making them. Lower Fees and Account Minimums We’re reducing our wrap (all-in) fee for... more »
Moneyball for Hedge Funds If you’ve followed us for any amount of time, you know that our Clone Score methodology is at the heart of our manager selection process. The best analogy for our process to think about a manager’s score... more »
The S&P 500 has returned 10% annualized over the five years ended 6/30/2018 (13% if you include dividends). Those are great returns especially when you put them into context. The number of 5-year investment windows between 12/1949 and 6/2018 that... more »
It’s been easy to argue against active management lately, too many funds to choose from, most of them underperform. In an environment where the S&P 500 has returned 15% annually over the past five years (double its historical average), it’s... more »
If you had to choose between experiencing drawdowns and experiencing downside deviations, which would you prefer? Anyone working in product development in asset management will tell you downside deviations are 10x as bad as drawdowns. Let’s define each so we’re... more »
Is the persistent decline in active managers' ability to generate excess returns permanent or simply a function of the current environment?
We take a definitive look at hedge fund holding periods. We analyze holding periods for all Form 13F disclosed securities as well as for those held with high conviction. We also look at whether the length of a manager’s holding... more »
The active vs passive debate continues unabated in the financial media. Passive strategies continue to accumulate assets while active strategies lose them causing many to proclaim that active investing is dead. Let’s take a step back and try to separate... more »
The very nature of making investment decisions is difficult – an investor can only evaluate an investment based on historical returns and/or credibility. Yet both of these attributes are poor predictors of what the investor is actually paying for –... more »
The following article was published on Absolute Return, October 15, 2015. There is a reason for the adage “you get what you give.” It’s true. Across most facets of life, actively pursuing goals and taking risks reaps reward. Investing... more »
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