Resources

Persistence Among Active Funds Is Hard To Come By

New report, same old story. Larry Swedroe unpacks highlights from the most recent SPIVA scorecard that offer still more powerful evidence of active management’s continued failure to persistently outperform. Since 2002, S&P Dow Jones Indices has published its biannual Indices Versus Active (SPIVA) reports, which compare the performance of actively managed equity funds to their appropriate index…

The Unique Retirement Issues Facing Women

Women continue to fight unique financial and life headwinds in planning for a secure retirement. Larry Swedroe and Wealth Advisor Katie Keary explore the impact of 12 specific challenges that women face, and offer financially empowering solutions to them. Women continue to fight unique financial and life headwinds in planning for a secure retirement. Larry…

Mutual Fund Benchmark Discrepancies Can Fool Investors

Some active mutual funds have prospectus benchmarks that understate risk and, thus, overstate relative performance. Larry Swedroe unpacks a study that explores how such funds benefit from that overstatement at investors’ expense. Evaluating the performance of actively managed mutual funds generally involves comparing a product’s results with some passive benchmark (the SEC requires that funds…

Know Your Risk Inclinations and Investor Personality

What type of investor are you? Larry Swedroe unpacks a CFA Institute Research Foundation brief on risk profiling and tolerance that looks at four investor personalities, and the potentially problematic behavioral tendencies likely to come with each. In my book, “The Only Guide You’ll Ever Need for the Right Financial Plan,” there’s a detailed discussion…

Estimating Underperformance Probabilities

Jared Kizer crunches the data to get a more realistic sense of the odds that four common factors will underperform over various periods. Professors Eugene Fama and Kenneth French and my colleague Larry Swedroe have done work highlighting the point that even premia with positive long-run expected returns can still underperform for long periods of…

The Long-Term Evidence on Factor-Based Investing

Is there reason to believe cross-sectional patterns in returns will persist, even after they’re known? Larry Swedroe reviews a study that explores this question using more than 100 years of factor data from around the world. Factor-based investing seeks to capture the long-term premiums highlighted by academic researchers. Factors are the security-related traits/characteristics that give…

Is Company Size Irrelevant?

Paper results or real-world advantage? Jared Kizer explores whether efficiently managed strategies can, net of fund expenses and trading costs, capture the historically larger value premium found in small-cap stocks. On paper, there is abundant evidence that various return premia have been larger in small-cap stocks compared to large-cap stocks. Table 1, for example, shows…

Tariff Talk and Trade Troubles

Economic and geopolitical news surrounding U.S. tariffs and an escalating trade war with China has produced a decent degree of turmoil (and even more headlines), but the prudent course of action remains to adhere to your long-term financial plan. News of an escalating trade war between the United States and China dominated headlines late last week as…

Persistent Fund Alpha and Active Manager Skill

A recent study found just eight active mutual funds out of 1,000 showed statistically significant alpha. Larry Swedroe examines the research, and offers some additional analysis demonstrating how elusive a prize true alpha really is. Qiang Bu, author of the study “Do Persistent Fund Alphas Indicate Manager Skill?”, which appears in the Fall 2017 issue…

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