Aug 29
Background For quite a few years now, many commentators and researchers have criticized active strategies that charge active fees to receive benchmark-like returns. If a portfolio looks a lot like the benchmark it is trying to outperform, it doesn’t mean there won’t be outperformance, but after taking fees into consideration it is much more difficult. …
Aug 17
Background When disappointing performance occurs, alarm bells will typically ring in the minds of investors, advisers, asset consultants and perhaps the managers themselves. Investing has only ever been a long game but thanks to the internet, the 24-hour news cycle, social media, etc. etc., it appears that success is expected to occur quickly and this …
Nov 07
We’ve all seen various developments in product design from hedge funds to long/short to real return approaches, and then there’s the increased focus on tactical and dynamic asset allocation. You would expect all of this to lead to different drivers of portfolio risk…i.e. away from traditional asset class drivers to market timing, investment selection, and …
Sep 20
The typical approach to portfolio construction in the world of financial planning is a 2-step process (of course, this is after the desired risk and return characteristics are settled). The first step is setting asset allocation and the second is investment selection where most of the industry chooses to select from a variety of managed fund strategies. …
Nov 08
Nobel laureate economist Robert Merton says David Murray’s Financial System Inquiry must fundamentally shift how Australia thinks about superannuation. He says the desire to maximise lump-sum balances at retirement is excessively risky; the focus should be on ensuring retirement income is enough to meet a desired standing of living. Source: AFR – 6 Nov 2014 …
Feb 25
When a financial adviser gains a investment client, on an ongoing basis that client pays fees for 3 main services/providers… Financial Adviser Investment Management…typically a fund manager Platform…for investment administration and reporting There can always be a fair amount of debate as to what the true margins are, particularly given some of the vertically integrated …
Mar 06
The process of financial planning is like any planning process… you find out where the client is positioned today, work with the client to establish goals whilst understanding the constraints to reaching those goals, and then design, present and implement a strategy to reach those goals…which is then reviewed on a regular basis..therefore go back …
Nov 09
There’s a brief article in today’s Investor Daily News that comments on “Managed Volatility” being the strategy to maximise returns…article here. I have to admit that I believe this strategy will be one of the new trends in equity focused managed funds over the next 12 months or so. Empirical evidence over the years the …
Nov 08
Source: MorningstarDirect The above chart shows the performance of the MSCI Australia Value index versus the MSCI Australia Growth index over the last 12 months (in fact through to close of trading yesterday). There’s obviously a hug divergence in performance as the Value index has returned more than 21% whilst the Growth index has barely …
Jun 27
Its been over a week since I posted so I thought I’d write about something that is a little bit different and hopefully may provide a little bit of food for thought. The above chart shows the performance of the MSCI Australia Value index (dominated by low PE stocks) vs MSCI Australia Growth index (dominated …