FYI: Can a financial advisor manage a portfolio of active funds and consistently select outperforming managers for her clients in advance?
It’s definitely possible, but highly unlikely. Trillions of dollars have come out of actively managed funds and shifted into systematic strategies, rules based strategies and index strategies. Cost is part of the story, but so is persistence.
Persistence doesn’t exist. Financial advisors are periodically asked to defend their asset allocation choices to the clients who’ve entrusted their money to them. Financial advisors used to put themselves into the position of selecting active fund managers and then either defending the underperforming ones or making a big show out of firing them, demonstrating their value-add to the client by making manager changes.
Regards,
Ted
https://thereformedbroker.com/2019/11/04/manager-of-managers/Meb Faber M*'s Managers Of The Decade 2010:
https://www.morningstar.com/articles/321713/announcing-the-morningstar-fund-managers-of-the-decade
