Mon, May 29, 2017
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. Investing - China's HNA wants to invest in Value Partners, Risk parity investors reap rewards from rebalancing act, SoftBank's $100 billion tech fund rankles VCs as valuations soar[more]

    China's HNA wants to invest in Value Partners From Reuters.com: HNA Group has alighted on a logical, if pricey, target in Hong Kong. The deal-hungry Chinese travel conglomerate known for overpaying wants to invest in Value Partners, one of Asia's few sizeable independent asset managers,

  2. Opalesque Exclusive: Investors warm to ESG, but seek standardization[more]

    Bailey McCann, Opalesque New York: Asset managers and asset owners plan to double their investment in Environmental, Social and Governance (ESG) driven strategies over the next two years, according to a survey from BNP Paribas Securities Services. The report, "Great Expectations: ESG - what's nex

  3. Opalesque Roundtable: France's hidden strengths in AI and machine learning[more]

    Komfie Manalo, Opalesque Asia: All nations offer their strengths and weaknesses, but one that is undisputed is the quality of the French scientists, claimed Guillaume Vidal, co-founder of French technology startup Walnut Algorithms at the

  4. AI-based hedge fund brings machine learning investing to masses[more]

    Komfie Manalo, Opalesque Asia: Machine learning-based hedge fund firm Greyfeather Capital is trying to bring artificial intelligence investing to the masses with its plan to expand beyond the limited reach of the alternative investments space. "We're excited to bring AI technology to traditio

  5. Outlook - Iconic hedge fund manager Seth Klarman says investors are missing huge risks, Paul Singer warns of a world at risk[more]

    Iconic hedge fund manager Seth Klarman says investors are missing huge risks From Businessinsider.com: An iconic hedge fund manager says investors are misperceiving risks in the markets - at a time when markets are hitting historic highs. Baupost Group's Seth Klarman laid out his concern