Is there a single hedge fund, pod shop, asset manager, fof, or literally any financial institution that outperforms the market over a long period of time?
High school student here just trying to get an understanding of the finance industry and investing in general
Renaissance Medallion Fund — rip to the legend
Yes, but do not forget that part of their success was also due to tax evasion. A couple of years ago they had to pay $7bn to make up for it. (Probably still outperformed when taking it into consideration).
Another question is also whether you understand outperformance as simply beating the returns of an index or whether you look at it on a risk-adjusted basis like for example the Sharpe ratio of the market vs the strategy. Barely beating the S&P after taking 3x the amount of risk (vola) for example would not be an indicator of a good investment management whilst barely undershooting the S&P at 20% the vola would be crazy good.
Returns are reported gross of tax… it shouldn’t matter either way even if paying short term capital gains tax with 100% turnover at 40% net you’re still beating the market by a wide margin net of tax. Let alone the 60%+ gross they posted.
From my own research, I’ve found that, while these funds don’t always OVERperform the market, they tend to be better at: a) handling risk, or investing in a very specific strategy that the customer wants or b) saving assets in a recession/crash. Try researching how some funds performed in 2008 - while they didn’t have returns beating the S&P for years prior, they only lost ~5% or less in ‘08. Great for someone who doesn’t necessarily NEED to earn a lot of money, but wants their assets to have stability (see: high net worth individuals, retirement accounts, etc.) I hope that answers your question, and this is only my research so far (intern), so if I’m wrong, feel free to correct me below!
Yes. There are many investors and firms who constantly “outperform”. If anyone tells you otherwise they are retarded and should not be trusted.
There are actually a number of retail mutual funds that have consistently outperformed, especially in the international and SMID space. There are even some in the US large cap space, which is a tough sub-asset class to beat.
To actually answer your question :) look into Artisan International Value or Oakmark funds
Cool thanks, will look into those. I was wondering about big banks’ asset management divisions. What are their goals and do they outperform?
Yea makes sense. But the fees don’t right? Like the point of paying a 2 or a 2 and 20 is for alpha and not for beta or factors like SMID cap. You can access that through literally .25% factor funds instead. So a huge part of it is like are you getting your bang for the buck too.
Are we only talking about public markets? I know the privates space much more and definitely so (e.g., over the span of 20 years). There’s so much concentrated alpha (mixed with beta) at the top funds.
Yeah I was just asking about public markets
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