Over three- and five-year periods about 85% of active equity fund managers in the US and Europe failed to beat their benchmarks, and over a 10-year investment horizon, managers across all international equity categories underperformed their benchmarks, according to an S&P study.
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“My advice to the 85% is to change the fund name, tweak the mandate and then hand it off to marketing for a fresh coat of paint.” Robert Ruderschmidt, portfolio manager, Overflowing Alpha Asset Management |
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“We believe the study does not necessarily indicate a performance issue, but instead points to the problem of investors having over-optimistic expectations for the timeframe of returns.” Louie Zheng, head of discretionary mandates, Global Behemoth Private Bank |
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“Our compliance department will not allow me to open the kimono on this issue.” Fanny Leung, corporate communications, Absolute Zero Risk Investment Management (AZRIM)
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“Past performance is not an indicator of future results.” Burt Harris, head of global distribution, Pushback Asset Management |
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“After we learned about these studies, our fund managers met the challenge by successfully shifting to unconstrained strategies so there is no benchmark to measure our funds against.” Pollyanna Sim, head of marketing in APAC, StraightTalk Fund Management Group |
