#SFTW: This is the year for active managers. Honestly

Posted by Robin Powell on January 15, 2016

SOMETHING FOR THE WEEKEND

Active managers.

Every year they say it, and almost every year they’re wrong: “2013/14/15/16 (delete as appropriate) is the year to back actively managed funds”.

Last January, we were told, conditions were perfect for active managers to use their skill and expertise to outperform their benchmark indices. What happened? OK, they didn’t do quite as disastrously as in 2014 — the worst year for active funds in living memory — but their net performance was still pretty shocking.

Again the papers are trotting out this tired old “story”. And not just the trade journals — you’d expect them to toe the industry line — but respectable newspapers too. Almost invariably the article is built on the opinions of a single active fund manager or fund shop spokesman, with no attempt made to seek an alternative view.

What do these journalists seriously expect active managers to say? “Once again, as a group, we’ve performed atrociously, and frankly you’re better off indexing”?

Read the full article here

 

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You might also want to read..

The New Year correction:

Where did all these instant experts on recessions come from? (Jeff Miller)

Time to ‘sell everything’? No, this is when a ‘hold everything’ strategy works (Andrew Oxlade)

Calm heads are called for as markets yo-yo (Merryn Somerset Webb)

The DOs and DON’Ts of market crashes (Barry Ritholtz)

What Warren Buffett isn’t doing (Dan Solin)

A sharp slide in indexes has one big plus (John Kimelman)

Probably everything you need to know about bear markets (Michael Batnick)

The most honest market forecast is “We have no idea” (Ben Carlson)

Crazy markets can build great retirements (Kristopher Wallace)

 

Best of the rest:

When will they ever learn? Staying top quartile is nearly impossible (Tjibbe Hoekstra)

The unlamented decline of the hedge-fund manager (Matthew Lynn)

The “star” hedge funds that fell to earth in 2015 (Lawrence Delevingne)

There were plenty of things that were nailed-on to happen last year but didn’t (Larry Swedroe)

There is no single, perfect valuation indicator (John Rekenthaler)

Rebalancing: Is it really worth it? (Michael Kitces)

Investment lessons from Genghis Khan (Tony Isola)

How to save money each month (Lisa Aberle)

 

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Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.

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