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Blackrock - Doll's Mutual Funds Using Models Not His Own
A lot of fund managers are using 3rd party research and models. I am not sure why ZH is making this a big deal. They have taken it to the level that he was stealing it. They is paying for these research and models. I see ZH reporting rather poor here.
We can argue if he was successful to use those models and drive his funds to success but that is not the issue.
That's surprising, because you've always been quick to praise ZH before.
And seriously, if you don't like the story, you may also want to call Reuters and tell them to take the "EXCLUSIVE" off their story because it's "not a big deal."
In previous prospectuses, the New York-based firm said a "proprietary multi-factor quantitative model" formed the investing strategy for its $3.7 billion Large Cap Series funds, managed by retiring Chief Equity Strategist Bob Doll.
This year's fund literature said the investing model used "quantitative factor models generated by third-party research firms."
Typically such a change indicates a shift in a fund's methodology. But there was no shift in the investment process.
***Instead, the new description came after the funds' board of directors learned that the investment models used for Doll's funds were never proprietary and had been based on other firm's models, according to two people familiar with the situation. ***Doll was not the one who alerted the company about the issue, they said***"
Additionally, "It is the fund manager's responsibility to keep the board informed of details of the strategies and investment process."
....would suggest a fund using other people's models and calling them their own until someone else besides the fund manager said something.
Whatever you would like to call that, fine.
While you may have a different take on the general conclusion of the ZH article, I couldn't agree more on the point that, for all the CNBC promotion of Doll over the years (he was on there every 5 seconds, it seemed like), here's someone who wasn't doing anything extraordinary - a permabull whose record wasn't anything of note at all in terms of these funds, but constantly appeared on CNBC no questions asked ("Gee, Bob, why have your funds underperformed their benchmarks for the last 1,3,5 and 10 years?" never entered the conversation) because he said what they wanted to hear. A CNBC "Master of the Market" whose three mutual funds members of this board would never have considered (even if they weren't load funds.)
Comments
We can argue if he was successful to use those models and drive his funds to success but that is not the issue.
And seriously, if you don't like the story, you may also want to call Reuters and tell them to take the "EXCLUSIVE" off their story because it's "not a big deal."
Whatever your take, this from the Reuters (http://www.reuters.com/article/2012/06/21/us-blackrock-quantmodeldisclosure-idUSBRE85K1JA20120621) "(Reuters) - In January, BlackRock Inc made a significant, but easy-to-miss change in the fund literature for three of its mutual funds.
In previous prospectuses, the New York-based firm said a "proprietary multi-factor quantitative model" formed the investing strategy for its $3.7 billion Large Cap Series funds, managed by retiring Chief Equity Strategist Bob Doll.
This year's fund literature said the investing model used "quantitative factor models generated by third-party research firms."
Typically such a change indicates a shift in a fund's methodology. But there was no shift in the investment process.
***Instead, the new description came after the funds' board of directors learned that the investment models used for Doll's funds were never proprietary and had been based on other firm's models, according to two people familiar with the situation. ***Doll was not the one who alerted the company about the issue, they said***"
Additionally, "It is the fund manager's responsibility to keep the board informed of details of the strategies and investment process."
....would suggest a fund using other people's models and calling them their own until someone else besides the fund manager said something.
Whatever you would like to call that, fine.
While you may have a different take on the general conclusion of the ZH article, I couldn't agree more on the point that, for all the CNBC promotion of Doll over the years (he was on there every 5 seconds, it seemed like), here's someone who wasn't doing anything extraordinary - a permabull whose record wasn't anything of note at all in terms of these funds, but constantly appeared on CNBC no questions asked ("Gee, Bob, why have your funds underperformed their benchmarks for the last 1,3,5 and 10 years?" never entered the conversation) because he said what they wanted to hear. A CNBC "Master of the Market" whose three mutual funds members of this board would never have considered (even if they weren't load funds.)