Hansi,

This is a really nice article.

I would add that quantitative analysis in fund research goes well beyond the specific track record of the fund(s). It should also dive into the underlying portfolio holdings which requires a significant amount of securities analysis as well. If you didn't perform this task how else would you know if you are adding to a well-priced portfolio? Additionally, if you didn't perform this task how can you be sure the manager is actually doing what they are saying? In other words, you have to look behind the numbers as they do not tell the entire story nor do they indicate forward looking return potential. My belief is that a strictly quantitative analysis would create an investment process that is not markedly different than performance chasing.

You are right that fund analysis is a terrible amount of work. The detailed level of research required to produce a reasonable list of good forward potential funds is daunting. The research also requires a large number of skills that can all be hard to master. I would add that this is a place where a very good adviser can add a lot of value. I just added a new problem, because good luck finding those.

Qualitative is a bit easier and can boil down to a checklist, that is if you have a good handle on what works over a long time frame.

Anyway, keep up the good thinking.

Adam