Från en ny studie som bara kom för några dagar sedan som intervjuar 69 “investment professionals” i London, Chicago och New York. Aktörerna valdes ut för att vara representatativa för “aktiv förvaltnings”-lägret (läs mer på sid 9). Det var t.ex. förvaltare med ett genomsnittligt ansvar för 140 miljardersportföljer. På analytikersidan hade man folk med 1 - 30 års erfarenhet.
Sjukt många intressanta rader, först min favorit:
All my own money is in index funds. (SS 27)
Först sådant som du redan känner till
For example, based on data from 1970-2001, Malkiel (2003) shows that the median US mutual fund produced returns more than 175 basis points lower than returns from the S&P index aft er expenses.
More recently, Morningstar’s comprehensive analysis of the performance of Active versus Passive funds in the US equity market shows that only 23% of Active funds outperformed their Passive counterparts over the period of 2010-2020 (Johnson, 2021)
The performance of Active vs Passive funds is also regarded as a cause of the consistent capital flows from Active fund management to Passive over the past two decades. Chronic underperformance, combined with relatively high fees, lead commentators to describe financial intermediation (of which Active fund management is a major component) as either grossly inefficient (Philippon, 2015) at best, or as an unjustifiable tax on society at worst (Arjaliès et al, 2017)
Om att det mer och mer går mot “vi” och “dem”
Jag som fetstilat.
Regarding actors involved in Active investments as members of a community of practice allows us to address the social and cultural dimensions of the seemingly technical knowledge associated with Active investment. The Active investment community of practice evinces a particular worldview. This worldview is built around the possibility of ‘generating alpha’ (Taffler et al, 2017) or in the mantra to ‘beat the market’ (Ellis, 1975). This elusive goal can be understood, simply, as improving returns while not taking on additional risk. However, as our findings indicate, this belief is more far-reaching than its mere economic meaning. Those who do appear to successfully ‘generate alpha’ on a consistent basis can be accorded celebrity status and their investment advisors labelled ‘star research analysts’ via mechanisms such as annual Institutional Investor surveys (Traflet and McGoun, 2008).
Notwithstanding these practices that undergird alpha generation discourse, self-belief in the Active investment community has been shown to be fragile (Chong and Tuckett, 2015). Fund managers tend to both believe and not believe that they can ‘beat the market’ (Taffler et al, 2017), and, relatedly, both believe and not believe in market efficiency (Ortiz, 2021; Roscoe and Willman, 2021).
This is suggestive of a certain cognitive dissonance (Festinger, 1957) held by members of the Active investment community. The rise of Passive investing introduces an interesting dynamic to this epistemic tension. On one hand, the growing success of Passive strategies like index investing carries with it the premise that it is not possible to beat the market.
As such, the conflict in the Active community between circumstance and belief intensifies, much in the way that it does when members of religious groups are faced with failed prophecies (Hood, 2011). However, in such circumstances, members of religious or other groups often tend to increase their commitment to their beliefs and even start to proselytize more vigorously.
In sociological terms, such responses constitute attempts to avoid the ‘hysteresis’ that ensues when objective possibilities are out of sync with subjective aspirations (Bourdieu, 2000). This characteristic of the Active community – its core belief in the possibility of beating the market – invites re-examination in the light of the rise of Passive investment.
eller sammanfattat såsom:
Community of practices defend themselves, the paper argues, in three ways. First, they assert a strong identity, to try to rally previously disparate members of the community together by offering a renewed sense of purpose. Secondly, they seek to delegitimise the knowledge of those who aren’t in their group and establish boundaries between ‘us’ and ‘them’. Thirdly, they frame their area of expertise as inaccessible by anyone other than themselves.
Sagt av dessa aktiva förvaltare
There was widespread recognition that more and more funds were being ‘lost to Passive’. This trend was explained by superior fund performance and lower fee levels. Indeed, the shift towards Passive was regarded as logical by many fund managers, who conceded that most investors would lose money after Active fees were considered.
You can see the attraction of Passive because you’re saying, well most fund managers don’t beat the index. So, why am I paying all these high fees when on Passive products the fees will be lower. [And] in terms of the performance [it] is the same or actually slightly superior. (BS59)
En artikel om studien:
In summary, interviewees confirmed that Passive investing is a growing phenomenon in financial markets, even to the extent that many recommended Passive investment vehicles rather than their own, actively managed funds
Professor Spence says he was struck by how candid some of the interviewees were. “We were really surprised that some individuals conceded the superiority of index funds,” he says. “That people even said ‘I wouldn’t invest in my own fund’ is truly remarkable and indicative of high levels of reflection and honesty, at least among some fund managers and analysts.”
“We had to coin a new phrase here to capture what was going on (in these interviews),” says Professor Spence, “and we chose the term epistemic opportunism. This effectively means snatching at any explanation that portrays active fund management as superior. The ‘epistemic’ element is to do with knowledge: active managers still argue that their knowledge base and ways of investing are superior, even if they concede that they tend to underperform passive funds on the whole.”