In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers, "If your firm manages investments actively and any of your funds generated alpha in CY2013, to what will you primarily attribute the alpha?"
If your firm manages investments actively and any of your funds generated alpha in CY2013, to what will you primarily attribute the alpha?
Almost half of respondents, 47%, chose security selection as their primary source of alpha. Despite decades of emphasis on asset allocation by academics and practitioners alike, only 26% of respondents said asset allocation generated alpha for them this year. Whether this result is due to a lack of asset-allocation-alpha opportunities in markets this year or a lack of application of its principles, the result is noteworthy. According to 12% of respondents, money managers have also had success with macro bets. Proponents of ESG analysis, however, are likely disappointed, with less than 1% of respondents voting for that category. In summary, a money manager from 30 years ago would probably recognize the proportions as familiar.
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