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Showing posts from October, 2013

The Elephant In The Room

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This September, a landmark research study of institutional investment consultants was released that continues to have big implications for both institutional and retail investors.
Three University of Oxford professors found that investment consultant recommendations really aren’t making the grade. Over a 13-year period, consultant recommendations under-performed passive investment strategies by 80 to 100 basis points.
It’s not easy to write-off this research. The academics studied the performance of the top investment consultants who control 82% of the institutional market. These institutional pension funds and endowments manage trillions of dollars in assets.
The Smoking Gun The study confirmed what everyone always suspected, namely that investment consultants don't consistently find money managers who beat the market. Equally as damning, though, is that the research found institutional investors happily followed their bad advice.
The question is why?
Like the corporate maxim tha…