financial services industry

Equity Mutual Funds’ “Active Share”

Here’s a remarkable initiative from the U.K., which you should not expect to see replicated here in the U.S., despite its significant value to investors. Neptune Investment Management, an active equity fund manager in the U.K., has announced that it will publish the “active share” if each of the funds it manages. What does this mean? Well, a fund’s active share is a measure of the extent to which the stocks in its portfolio differ from those comprising the index against which it should be benchmarked. For example, a large-cap U.S. equity fund might reasonably be benchmarked against the S&P […]

Another Bad Year For Active Managers

From the Financial Times (11/11/2014): “Fewer fund managers are beating the market this year than at any time in over a decade, piling further misery on a profession that faces increasing investor scepticism.” Among actively-managed U.S. large-cap equity funds, “Only 17.7 per cent are beating the Russell 1000 index of large-cap stocks so far this year. That compares with 40.5 per cent for 2013 as a whole.” Since 2003, “there has only been one year–2007–when a majority of active managers beat the market.” Every year, of course, there’s some convincing new reason why the “irrational”market once again stumped the managers. […]

Where are the Customers’ Yachts?

Two recent articles on “top financial advisors” have left me slack-jawed with disgust. The first was in my local daily paper, the Naples Daily News (that’s Naples, Florida rather than Napoli, Italia!): “Thomas Moran, managing director of investments and a founding member of the Moran Edwards Asset Management Group of Wells Fargo Advisors in Naples, has been named by Barron’s as the top adviser in Southwest Florida.” Hey, congrats to Mr. Moran!  And what criteria were used to identify him as “the top adviser”? “Factors taken into account include assets under management, revenue produced for the firm and regulatory record, […]
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