The three signs of future underperforming funds

first_imgAsset managers with a low information ratio are likely to be among the worst benchmark-adjusted performers over subsequent years, according to research.The study, conducted by Andrew Clare, professor of asset management at Cass Business School, identified quantitative indicators that could help investors determine the likely future performance of their fund managers.It also found that managers likely to underperform their benchmarks in subsequent years were those with a high fund turnover or that experienced high net fund inflows.The research used a comprehensive data set comparing the performance of over 2,100 US mutual funds from 2000 to 2017. Overall, the study found the size of a portfolio did not prove to be a consistent way of identifying outperformers.However, it found some – albeit weak – evidence that both large and small funds subsequently produced poor benchmark-adjusted returns.This, it suggested, was because at both extremes the funds suffered from a lack of fund manager attention.The study said: “For the small funds, [could this be] because they are just not significant from a fee generation perspective, and the larger funds, perhaps because the manager does not want to rock the fee-generating boat?”However, both net flows and fund turnover did produce fairly consistent subsequent returns, according to the research. Funds that received high net inflows in one year tended to produce poor benchmark-adjusted returns in the next year.The authors remarked: “It seems plausible that in- and outflows distract managers from their investment strategies, making it difficult for them to implement those strategies.”And they said there was similar evidence when using fund turnover as a criteria: “Funds that experience high levels of turnover in year t, tend to produce poor benchmark-adjusted returns in year t+1. High turnover has been linked to wealth-damaging behavioural biases, and it appears that there may be some evidence for this phenomenon in our results.”Clare said: “Choosing the right active fund manager is clearly a challenge for all investors, given the wide range of choices out there. It is equally important to know when the time is right to switch investment funds from an existing manager to a new manager. Our research suggests avoiding investing with managers that produce a low information ratio, have high turnover or where the fund experiences high net inflows.”The study was co-authored by Mariana Clare of Imperial College and supported by Inversis, the Spanish investment technology consultancy.last_img read more

ESG, risk sharing and more in EU pensions expert group final report

first_imgThe EU should convene an expert group to prepare voluntary guidance about how pension providers can “better understand and model environmental, social and governance-related (ESG) risks and their relation to ‘traditional’ financial risks in their portfolios”, according to a high-level group of pension experts established by the European Commission.The recommendation is one of many set out in the group’s final report, which provides analysis and policy advice about the role of supplementary pensions in contributing to adequate income in old age, and how the market for them could be developed.Dated December 2019 but published this week, the report addresses challenges affecting the concept and design of supplementary pensions and their role in relation to sustainable finance and sustainability.Key recommendations include that: member states provide incentives for social partners – trade unions and employer bodies – to set up collective pension plans that ensure risk-sharing between members;member states and providers ensure that occupational pensions provide pension credits for career breaks linked to childcare or other caring responsibilities; andthe EU, member states and social partners develop tools and methodologies to assess EU pension providers’ vulnerability to long-term environmental and social sustainability risks.With regard to the topic of sustainable finance, the expert group’s recommendations included that the EU:clarify how pension providers can take into account the impact of ESG factors on investment decisions; and“ensure that sustainable investment rules are compatible and consistent with other regulatory requirements and avoid duplication, in particular as regards transparency and information disclosure”.‘Appropriate follow-up actions’In a statement welcoming the final report, PensionsEurope said the recommendations, which were addressed to EU institutions, national policy makers, social partners and other stakeholders, “must be carefully assessed with appropriate follow-up actions”.It said it valued the holistic approach suggested by the high-level expert group, “which considers both the interplay between labour markets and pensions and between public social security and supplementary pensions”.Matti Leppälä, who is secretary general of the umbrella body for national pension fund associations, was one of the members of the expert group.“I am confident [the final report] contains useful analysis and reflections for policy makers, social partners and other stakeholders,” he said. “I hope that the new European Commission can benefit from this work and takes forward measures that enhance the role of supplementary pensions in Europe.”PensionsEurope said it would be discussing the contents of the report with its members over the coming weeks.The report can be found here.last_img read more

It’s Shanahan’s turn at Galway

first_img De Bromhead’s excellent day was boosted as his Sadler’s Risk also took third, with Alderwood in fourth. De Bromhead said: “That’s deadly. We were hoping we’d get back to our form last autumn and if he did he looked in off a good mark. “His prep run was disappointing, but a lot of horses didn’t get into that race and obviously he’s more of a stayer. “Funnily enough the one person who wasn’t disappointed then was Barry Geraghty. He was delighted and said he was good. “I’m delighted to win this and delighted for Anne and Alan Potts. Anne is in hospital at the moment and I know that will be a real tonic for her. “They’ve been amazing supporters over the years and I really appreciate it. “My father was just touched off in this race with Bishops Hall so it’s great to set that little record straight. It’s such a famous race so it’s great to get our name on the board. “I always felt he was a Graded horse. He won his Grade Two, it probably wasn’t the greatest Grade Two, but he won it. Press Association Shanahan’s Turn produced a gutsy display from the front to run out a convincing winner of the Galway Plate. Henry de Bromhead’s charge was a relatively unfancied 16-1 chance after a couple of disappointing efforts recently, but he travelled sweetly for Johnny Burke, sharing the pacemaking duties with Baily Green. Burke was happy to go clear after the third-last and looked to have the race sewn up after jumping the final two fences well, and though The Paparrazi Kid gave chase up the long run-in, he was still five and a half lengths behind at the line. “Then he hit soft ground and we made a couple of mistakes with him. We know him now. “He could go for the race Sizing Europe won the last few years at Gowran and hopefully he can develop into a Grade One horse. “It was brave of Johnny to do that and let him roll. I was delighted when I saw him do it, win, lose or draw. “The jockeys tell me what they are thinking before the race and unless I completely disagree with them I let them off as they are top riders.” He added: “I was delighted with Sadler’s Risk. He stayed on really well and Andrew (Lynch) gave him a great ride. “That was his first handicap and it was some run. His jumping early was a bit novicey. “We’re a little tied with him as he doesn’t go left-handed so the Kerry National is out, but there are plenty more good races.” Burke said: “That’s some feeling! It brings back fond memories of 2007 when my father (Liam) trained the winner here (Sir Frederick). “I was claiming 5lb this time last year when I rode in the Plate and finished third and in late September I was offered this wonderful job with the Potts, which has give me the chance to ride some great horses and I’ve been very, very lucky. “I’m very grateful to Ann and Alan Potts.” RaceBets introduced Shanahan’s Turn at 16-1 for the Ryanair Chase and 25-1 for the Cheltenham Gold Cup. last_img read more

Raiders owner Mark Davis gives ‘heartless’ interview after final game in Oakland

first_img“I’ve already been there in 1982 when we left the first time,” said Davis to Oakland news station KTVU. “So it is not that big of a deal now.”#Raiders fans deserve more than this from an owner. Sad.— Cameron Cleveland (@CamCleve2) December 16, 2019MORE: Why are the Raiders moving to Las Vegas:?Raiders fans were not happy with Davis’ comments.This has everything you’d expect from Mark Davis:1. Heartless2. Soulless3. Clueless about PR4. Clownish wardrobe straight outta “Dumb & Dumber”5. Deeply stupid6. Can barely put a single sentence together.7. A public embarrassment— Chris De Benedetti (@CDeBenedetti) December 16, 2019Can’t even come up with literally anything to say…pathetic. What a joke.— Danna (@rockridgeAsfan) December 16, 2019Mark Davis is an asshole. This is precisely why cities need to stop giving welfare to @NFL teams. Look at Stan Kroenke. He left St. Louis high and dry. Spanos screwed San Diego. Both bolted for LA. These owners don’t give a damn about these cities. They care about $$$.— rolandsmartin (@rolandsmartin) December 17, 2019Mark Davis can kick rocks. Looking forward to when the NFL takes the team from him and Jerry gets to sell it to one of his buddies.— Dieter Kurtenbach (@dieter) December 16, 2019Despite being a very wealthy person, tact is something Mark Davis does not possess, nor can he purchase it— Sean Cunningham (@SeanCunningham) December 16, 2019I would not wish relocation on any fan base ever it’s devastating. Be thankful most of you are fans of teams whose owners appreciate loyalty. Mark Davis is the scum of the earth.— Roddy (@TheRoddyP) December 16, 2019Mark Davis sucks. #RaiderNation— Andrew Shannon (@daSHANNIMAL) December 16, 2019 Raiders owner Mark Davis is being called heartless for his interview following the Raiders’ final game in Oakland.Davis was asked to share his feelings about the team moving to Las Vegas — and he had some interesting words about leaving.last_img read more