Larry Swedroe examines a new study that highlights the negative relationship between activity and performance in bond funds. Does it pay to be active in fixed-income markets? To help answer that question, Martin Rohleder, chair of Finance and Banking at the University of Augsburg, examined the performance of active fund managers in his December 2017…
Larry Swedroe talks to Bloomberg ETF IQ host Scarlet Fu in an interview that tackles topics ranging from the Yale endowment to passive fixed income funds and the hurdles facing active managers. Diversify broadly across unique sources of risk and return, Larry Swedroe tells Bloomberg ETF IQ host Scarlet Fu in an interview that tackles…
Larry Swedroe unpacks the newly released year-end 2017 SPIVA report and its look at active management’s underwhelming performance. Since 2002, S&P Dow Jones Indices has published its S&P Indices Versus Active (SPIVA) scorecards, which compare the performance of actively managed equity mutual funds to their appropriate index benchmarks. The 2017 report includes 15 years of data. Following…
Larry Swedroe concludes it’s premature to give up on the value factor, but also that its premium has only been earned by investors disciplined enough to stay the course through sometimes long periods of underperformance. As the director of research for Buckingham Strategic Wealth and The BAM Alliance, I’ve been getting lots of questions about…
The latest SPIVA scorecard is out, and Larry Swedroe unpacks results that show persistence in performance beyond the randomly expected remains out of reach for active managers. Since 2002, S&P Dow Jones Indices has published its biannual Indices Versus Active (SPIVA) reports, which compare the performance of actively managed equity funds to their appropriate index benchmarks….
Larry Swedroe takes a look at the data and builds his case for why investors should continue to expect a value premium going forward. Recency bias—the tendency to give too much weight to recent experience and ignore long-term historical evidence—underlies many of the mistakes commonly made by investors. It’s particularly dangerous because it causes investors…
Larry Swedroe explores how awarding star ratings and crowning “category kings” can influence investor (and manager) decisions. To date, an overwhelming body of academic research (including on active share as a predictor) has demonstrated that a mutual fund’s past performance not only fails to guarantee its future performance (as the required SEC disclaimer states), but…
A new Vanguard study found that a total-return approach is superior to one focused on dividend strategies. Larry Swedroe unpacks the research and explains the downside of a preference for dividends. Dividend strategies have drawn increasing interest from investors around the world as central banks have pursued both quantitative and qualitative easy monetary policies, keeping…
If diversification is a free lunch, use the full buffet. In a recent article that highlighted the perils of owning individual stocks, I offered the historical evidence demonstrating how only a small percentage of stocks have accounted for all the gains provided by the market—with the vast majority earning a big, fat zero in aggregate cumulative…
Market forecasters capitalize on our desire to know the unknowable. Tim Maurer, Director of Personal Finance, The BAM Alliance Just for fun, Google the words “market pullback.” There are over 2.2 million results–most of them market predictions–and the first page of results is dominated by calls for an imminent market reversal that the simple desk…
New research shows that “portfolio pumping” still occurs at mutual fund families. Larry Swedroe, Director of Research, The BAM Alliance Portfolio pumping—also known as “painting the tape” or “leaning for the tape”—is a market-manipulative strategy that mutual fund and hedge fund managers use to mark up their holdings at the end of the quarter by…
Larry Swedroe breaks down Europe’s SPIVA results to show active strategies aren’t likely to outperform. Larry Swedroe, Director of Research, The BAM Alliance Earlier this week, I provided some highlights of from the S&P Dow Jones Indices Versus Active (SPIVA) 2016 U.S. Scorecard. Today we’ll look at the SPIVA Europe Scorecard, which compares the performance of actively…
Larry Swedroe continues the case against active share as a source of meaningful outperformance. Larry Swedroe, Director of Research, The BAM Alliance Active share is hailed by some to be the holy grail in terms of its ability to identify future fund performance. My posts of April 24 and April 26 presented the evidence demonstrating that active share is…
Last week, we examined the data (from my new book, “Your Complete Guide to Factor-Based Investing,” which I co-authored with Andrew Berkin) on the odds that the premiums associated with some common investment factors would produce a negative return over various horizons. We then examined how constructing a diversified factor portfolio might impact those odds…
The results of the U.S. presidential election not only surprised almost all the gurus who were saying that a Hillary Clinton victory was a sure thing, but also those forecasting that, if by some miracle Donald Trump won, a stock market crash was bound to occur. Prior to the election, I had received many inquiries…
