Wed, Aug 24, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Lipper research highlights difficulties in picking outperforming actively managed funds

Tuesday, May 08, 2012

Beverly Chandler, Opalesque London: A report from Lipper by Ed Moisson, head of UK and Cross-Border Research, examining how successful actively managed mutual funds in Europe have been in out-performing indices over the past twenty years, finds that typically 40% of equity funds out-perform their benchmarks, although this figure varies widely over time and for funds investing in different regions.

In Beating the Benchmark Moisson writes: "Active fund managers’ ability to out-perform their benchmarks sits near the heart of any discussion on the relative merits of active versus passive investing". It is the different level of risk in actively managed funds and the associated additional cost of actively managing investments that weighs against their popularity. Investors are concerned that actively managed funds will, against all that, significantly under-perform the index, Moisson says. "The argument against investing in a passively managed fund is that one not only misses out on the possibility of superior returns that an active manager can offer, but also that, in principle, one is guaranteed to under-perform the index".

However, going by statistics alone, the active fund management industry is clearly more popular with actively managed equity funds in Europe standing at just under €1.5trn, ($1.31trn) while index trackers have €160bn ($209bn) and ETFs €139bn ($181bn). "In other ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. LatAm hedge funds surge in 1H to +24.4%, emerging markets assets rise[more]

    Komfie Manalo, Opalesque Asia: Hedge funds investing in Latin America posted strong gains through mid-2016, reversing declines in four of the past five years, including the last three years, to lead all areas of hedge fund performance through the first half of 2016, according to the latest HFR Em

  2. Asia - LGT Capital Partners: Alternatives set for continued rise in Asia[more]

    From Asianinvestor.net: More flows are likely into insurance-linked strategies, private equity and trend-following strategies/CTAs, given the benefits of such investments, argues LGT Capital Partners. Despite the numerous quantitative easing programs and bailouts of recent years, the quest for

  3. Opalesque Roundtable: Low and high fee investments often better than mid fee hedge funds[more]

    Komfie Manalo, Opalesque Asia: Hedge funds that charge the low and high fees stuff often provide better returns than "those sort of mid-fee investments", said Keith Haydon, chief investment officer of Man FRM. (Alternative) investment managers who charge high fees would often provide the most int

  4. Opalesque Exclusive: Algorithms platform aims to target typical challenges found in quantitative hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Last month, Quantopian received investments from Point72 Ventures, the new venture capital arm of Steven Cohen’s Point72 Asset Management.

  5. Hedge fund investors pull $5.7 billion in July[more]

    From Bloomberg.com: Hedge funds suffered a third consecutive month of outflows in July as investors withdrew $5.7 billion, according to industry tracker Eurekahedge. Redemptions totaled $20.7 billion in the three months through July, with money managers betting on equities suffering $18.4 bill