Skill: Gone the Way of the Dodo?
Investment skill is the raison d’être of the asset management industry, managers sell it and clients pay for it. In spite of this, empirical evidence of its existence, and what it looks like in practice, is sparse; in fact there is a mountain of words, papers and opinions arguing that it’s as likely to be spotted as the extinct dodo.
This paper seeks to fill that gap: using the Inalytics’ database we show that there are skilful managers who generate alpha in excess of fees, and more importantly the specific elements of their investment processes that generate that alpha.
“Thing of beauty” might be a touch poetic, but a dodo it clearly isn’t.
Access the full research paper here.
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