YouSaid · the spoken record

Jeff Ptak

lines on the record: 59
first: 2016-12-20
most recent: 2016-12-20
sittings or episodes: 1
sources: podcast

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“And applying his or her trade, but also eats his or her own cooking. I think it's a pretty defining gesture. It suggests that they really believe in what they're doing. So that's a second thing that I would look for. A third thing that I would look for is, and this is a bit more technical and some people would think maybe it's obtuse, I do tend to focus with equity managers on turnover rate. This will depend a bit on the style. But with fundamental managers that have low turnover rates, that tends to tell me quite a bit about how they're wired, how they're process works before I even understand how they invest. So I focus on that as a third thing. And maybe a fourth thing that I'll just throw in is sort of an overarching measure. I want to know something about the fun family concerned. Is it monoline? Do they only focus on asset management? Or do they hail from maybe a”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so that's a great question. So I think at the top of my list, I would put fees. I know sort of what a somewhat unoriginal pedestrian answer that is, given the shift towards low cost. But it is indeed very, very important. We can get into why that is. But generally speaking, our research has found that the cheapest quintile of funds in a given category are about three times as likely to survive and succeed than the most expensive quintile of funds. That's the payoff that you get from choosing cheap active funds. I think the second thing that I would focus on is manager ownership of fund shares as well as manager tenure. Now, manager experience is not a panacea. We see plenty of experienced managers that have ho-hum results aren't all that talented. So that in and of itself isn't a silver bullet. It can be reinforcing though when you see a manager who not only has been around for a while,”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Assuming that they're clustering towards that upper right hand corner of the style back. So that style leadership now trend is probably the most straightforward.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's call it mark a trend. So up versus down. And then the third, which is probably the most technical in nature, is dispersion. I'll try to take those sort of briefly one by one. So style leadership, generally speaking, as an active manager, it's not in your favor when your subject style, so let's say I'm a large growth manager, when my style is leading the way. And why is that? It's because the index to which I'm compared tends to be more style pure than I am, and therefore it's going to outperform if that style is indeed outperforming. And that has been the case for the simple reason that large cap until relatively recently has been beating small cap and also growth has been beating value. And large cap managers, generally speaking, they are messy towards mid and small and towards value.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so that's a great question. There's probably three cyclical factors that have been holding active funds back in particular, especially here in the US. And I'm speaking of equity funds. The first is the nature of style leadership. The second...”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's not quite as liquid as you know. And so we haven't seen the same sort of wholesale shift there as we have in other areas.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“That's an excellent question. So I would say that by far the biggest victim, if you want to call it that, or casualty has been large cap and large cap growth specifically. We've seen a very big shift of assets from those styles, and I'm speaking of U.S. equity styles, large cap and large cap growth, that's shifted into passive and moss. And so a lot of that money has ended up in, say, total stock market, Vanguard, or let's call them S&P 500 trackers. So that's an example where we've seen a real meaningful shift. I would say an area that's been a bit less vulnerable to the shift, you know, areas that are a bit less liquid, a bit less indexable, if you will. So good examples would be maybe fixed income, in particular Munis. It's a harder area to index.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“The opening up of platforms, the unbundling delivery of advice and investment solutions, I think that that's probably spurred the focus on cost, among other things. And that's one of the reasons why investors and those that are representing them have moved towards passive investment. So if there's one thing, that's probably the biggest one that's got our attention.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so first off, thanks, Patrick, for having me. It's a great pleasure to be able to join you and share our perspective. And so I would say that certainly the most prevalent trend that we're seeing right now, and this will be familiar, I think, to a number of your listeners, is the shift towards lower cost mediums for investment, most notably passive and specifically ETFs. And so it seems the tide is going out on active and the money is moving into passive, low-cost investments. And so we've seen a pretty significant shift in market share, just focusing on the US from active, I should say, into passive, that is from higher cost investments into lower cost investments. And so certainly that's something that we're focusing on. But in a sense, that's a bit of a result of other forces that have swept the industry.”
2016-12-20 · Invest Like the Best · Jeff Ptak – The Prospects for Active Management - [Invest Like the Best, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source