FYI: (I will link episode as soon as it becomes available for free, early Saturday Morning.)
Regards,
Ted
April 5, 2018
Dear WEALTHTRACK Subscriber,
Talk to any active money manager and they will tell you their biggest competitive threat is the trend to passive investing. The nine-year bull market has made index investing profitable and seemingly risk-free. A record $684.6 billion dollars flowed into U.S. mutual funds and ETFs in 2017 with $692 billion going to passive funds and nearly $7 billion leaving actively managed ones.
But there’s another competitive threat to active managers that is less talked about. It’s called the “paradox of skill”. Financial thought leader and former WEALTHTRACK guest, Michael Mauboussin wrote about it in his fascinating book, Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich. The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. It turns out professional investors and their computers have become so skilled at gathering and analyzing market data and spotting price discrepancies that as Mauboussin told us in a WEALTHTRACK interview: “…skills become more uniform. There’s less variance or difference between the best and the worst.” The paradox of skill is that as investors become better, luck plays a more important role in performance results, especially over the short term.
How does an active manager maintain an edge over passive investing and more skilled competitors? That’s what we will discuss with this week’s guest. He is Simon Hallett, Co-Chief Investment Officer of Harding Loevner, a global money manager which has concentrated on buying high-quality growth companies since its inception in 1989. Hallett, who joined the firm in 1991 as a portfolio manager, gave up those duties when he assumed the CIO role in 2012. He is now sharing the title.
With $65 billion in assets under management, the firm’s core business is institutional and 25% of its clients are overseas. It also runs several mutual funds including Global Equity, Emerging Markets, and International Equity. All three have earned Morningstar’s Silver Medalist analyst rating.
As usual, this week’s program is available to our PREMIUM subscribers immediately. In our exclusive EXTRA feature, Hallett will discuss his investment in a professional, English soccer team, Plymouth Argyle.
Thank you for watching. Have a great weekend, and make the week ahead a profitable and a productive one.
Best regards,
Consuelo
Video Clip:
M* Harding Loevner Famil Of Funds:
http://quicktake.morningstar.com/fundfamily/harding-loevner/0C00004AKV/fund-list.aspx 
