Market Insight

Performance Chasing

Did you know the average investor’s annual return is about 2% below the average fund return?  Much of this variance is attributable to chasing performance, as assets pile into a fund that has had a good performance run just to see that performance mean revert. This Ethos provides some cold hard facts on performance chasing and provides a more constructive framework to review existing or new managers for your portfolio.

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Market Insight

The Search for Alpha

Alpha is the goal of most investors, adding performance over an appropriate risk adjusted benchmark. In this edition we theorize where does alpha come from, who is on the other side of everyone’s trades and some implications on the declining market share of active management. Plus an intro of looking for alpha – behavioral style which we will explore further in next week’s edition.

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Market Insight

Market Cycle: Let the good times roll

This week we provided an update on our Market Cycle framework.  With 26 of the 30 indicators bullish, we have not seen this many in the green in a long time. US & Global economic data is strong, fundamentals are improving, sentiment/momentum is good, the only negatives are the Fed raising rates and valuations.  Now this doesn’t mean there isn’t a risk of a correction, but should one arise it is safer to say it is a correction and not then end of the cycle.

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Market Insight

Active vs Passive: When, Where and Why to be Which

If the 1990s were the age of the mutual fund, this has got to be the age of ETFs given fund flows and rising popularity.  However since some funds are more active than others, defining active as being different than the index, and ETFs now come in passive, factor based and fully active, it is really not a product vehicle argument anymore.  It is the spectrum ranging from passive index strategies to active.  In this edition we share our views on the changing industry landscape.  Plus share our thoughts on what kind of markets and when to be more active or more passive.

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