Monday, 20 March 2017 20:54

When the facts change...

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When the facts change, I change my mind

(John Maynard Keynes)

 I am lucky enough to help financial planners and small institutions build Investment Models. In my opinion, this is one of the best jobs in the financial services industry. One of the reasons for that is that I get to meet with lots of interesting people: planners, clients, their staff and lots of fund managers.

Saturday, 27 August 2016 09:15

Right now past performance is the enemy

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I have been lucky enough to work with advisers, other researchers and super funds on portfolio construction for a number of years. The process is always illuminating and rarely fails to surprise me in one aspect in particular: short-term past performance is so regularly used as a guide to the future.

Evergreen Consultants, an independent boutique investment consulting group working exclusively with financial advisory firms and family offices, is pleased to announce that it has finalized membership of its Asset Allocation Committee.  

The world was stunned to see Brexit become a reality last week. Here is Australia, we watched the voting unfold on a cold, cloudy Friday. Many of us sat glued to screens, watching markets and currencies writhe.

The elusive search for the next great fund manager is one that we all spend time on. Unfortunately, most of us seem to focus only on past performance and maybe sometimes volatility, divining insight that just doesn’t exist from small movements in monthly numbers. A quasi science where no science exists, reinforced by confirmation bias and marketing blurb.

‘Nowadays, everyone knows the price of everything and the value of nothing.’

Oscar Wilde

The use of ETFs and index funds by financial advisers is skyrocketing. In fact, to the year ended October 2015, ETFs experienced 37% growth to around $20b. They’re now used by over 200,000 investors and 7,600 advisers. 1

The reasons why these types of funds are becoming popular are easy to spot. 

In a world where market returns are low, it can be an easy route to ‘add value’ by lowering costs – surely this must lead to better returns for clients.