Advisor Publication Series
Pundits routinely deem many asset classes to be broken, unlikely to earn investors a reasonable future return. We survey several of these and show that their performance leading up to the warning was within their normal range of outcomes and rebounded over the following five years.
The biggest failure in investment management—the gap between the returns realized by the investor and the returns earned by the strategy or fund the investor owns—typically remains in the shadows with the glare of the spotlights focused on alpha.
Tax-aware and tax-advantaged investing have come a long way since Jeffrey and Arnott (1993) published one of the first investigations into the impact of taxes on active management performance.
Diversification and its long-term benefits have been accepted as a core investment insight. Many have begun to question its benefits, however, due to the underperformance of most diversifying asset classes over the last five years.