Investment Management Roundup – Week Ending 5.1.15

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“Active and Index Funds: How Do They Really Stack Up?”
Christine Benz and Ben Johnson, CFA | Morningstar | | 4.16.15

How Do Active and Index Funds Really Stack Up“… not all passive strategies, not all benchmarks, are created equal. It underscores that understanding benchmark construction, understanding how reflective an index is of the opportunity set that’s available to active managers in a given category is going to go a very long way toward defining whether or not it will look more or less successful relative to an active strategy.”

“The Future, According to the Future”
Kip McDaniel, EIC | | | 4.19.15

According to the Future“Want to know where asset management will be in a decade, but don’t have time to read 40 pages of interviews? Well, you (a) should make the time, because (b) it is well worth it. But if (a) and (b) aren’t immediate possibilities, then there is option (c): have me pick out the clearest insights into the future from this year’s Forty Under Forty.

Reading through the (CIO-customized) Proust questionnaires given to each member, two trends dominate the group’s view of the future: the rise of technology, and the decline of active management and accessible alpha.”

“Get the Best out of Active and Index Funds”
Christine Benz | Morningstar | | 4.16.15

Best out of Active and Index Funds“In this 60-minute roundtable report, Morningstar’s Russ Kinnel, Ben Johnson, John Rekenthaler, and Christine Benz dissect indexing’s popularity, index versus active fund performance, and how investors can effectively blend the best of both in a portfolio.”


“First Impressions Matter The Importance of Typography in Investment Management Presentations and Reporting”
Assette | | 4.24.15

Importance of Typography“Typography is a subtle tool. When used judiciously, it doesn’t call attention to itself. Instead, it helps the reader comprehend the content comfortably and quickly. Poor typographical choices become a distraction — like a tacky necktie worn by a presenter — overshadowing the message they are meant to convey. Investment managers who dismiss the importance of font choice in their presentations and reports do so at their own expense.”


“9 Mistakes Quants Make that Cause Backtests to Lie”
Tucker Balch | The Augmented Trader Blog | | 4.27.15

overly optimistic backtests“All too often strategies look great in simulation but fail to live up to their promise in live trading. There are a number of reasons for these failures, some of which are beyond the control of a quant developer. But other failures are caused by common, insidious mistakes. An over-optimistic backtest can cause a lot of pain. I’d like to help you avoid that pain by sharing 9 of the most common pitfalls in trading strategy development and testing that can result in overly optimistic backtests …”


“The Day that Changed Wall Street Forever”
Jason Zweig | | Wall Street Journal | 4.30.15

The Day that Changed Wall StreetMay 1, 1975: All-out war among brokerage firms. NYSE threatens to sue U.S. government. Critics call the SEC the “Soviet Economic Committee.”

According to WSJ blogger Jason Zweig, it “may well have been the most momentous day on Wall Street since the predecessor of the New York Stock Exchange was formed in 1792.”

Find out how May Day changed the way we do business forever — and opened up a whole new world to individual investors — in Zweig’s excellent analysis at

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