ryan, performance seems to speak loudest to clients, although I’m more of a people and process guy. My personal #1 criteria is the perceived integrity of the key principal or principals, but that is often hard to judge. I appreciate a numbers based approach, but I think value is best served by a human understanding of who is actually managing your money. Given the criteria you mention, besides 3+ year performance, fees are typically the most important factor. I would take a look at alpha/tracking error to determine if it fits the mandate for active/passive, but not put as much stock into it compared to discussions with the manager or consultant relations folks. I forget what Treynor ratio is, but if it’s similar to Sharpe, then I suppose that is a typical measure of “risk-adjusted” performance, and investment savvy clients are conditioned to appreciate that concept. woollycat, I am doing CFA for the credential bias of many prospects. I don’t expect to move into anything after I complete the program. By then I hope to have a decent book of my own business, but there are experience barriers that many institutions are reluctant to waive. I’m really just trying to do everything I can to get ahead as a consultant, and CFA means something to others. Please don’t hold this against me, but I’m not terribly impressed by the CFA designation; but I do humbly respect all who have the discipline to plow through the materials. Perhaps my opinion will improve if I am able to pass the level 1 and get into more advanced theory. I appreciate that you both took notice, and I hope that my answers were useful.
thanks hawg! do you use any mutual funds. if so, give me a couple that meet the criteria you mentioned
MO - just deal with derivatives
Currently working as a Corporate Financial Analyst. Started off working as a Financial Advisor then moved to corporate finance. Wish I would’ve went buy-side first.
Manage deposit pricing analysis/modeling for major money center bank. Fascinating work, but would someday like to work with other items on liability side of balance sheet…
Financial Advisor for one of the big five banks, but not a lot of exposure to anything other than mutual funds and fixed income investments for the individual investor. Took the CFA Level 1 on the advice of one of my clients - (a charterholder) - useful knowledge in my current role and hoping it will lead to a position as an Associate Fund Manager at some point.
RWT-look for pm
hawgdriver Wrote: ------------------------------------------------------- > RWT-look for pm I guess you can’t pm here, drat. Obviously, this is just for the sake of discussion, and is not advice (not that anyone should be inclined to take it anyway ;O) Our clients are in mutual funds, commingled and separate accounts, and partnerships. You asked for a few mutual funds that fit my criteria for being a superior fund. Dimensional MidVal and American Beacon SmCVl spring to mind, but there is a very good chance I’m leaving out some other badasses (like D&C Stock on the basis of long term performance). It’s also hard not to favor American Funds and Vanguard. Fidelity and TRowe also have some excellent offerings, especially with Fidelity moving into Vanguard country with their new K-shares. RWT, what are your thoughts, and what prompted you to inquire?
hawgdriver Wrote: ------------------------------------------------------- > hawgdriver Wrote: > -------------------------------------------------- > ----- > > RWT-look for pm > > > I guess you can’t pm here, drat. Obviously, this > is just for the sake of discussion, and is not > advice (not that anyone should be inclined to take > it anyway ;O) > > Our clients are in mutual funds, commingled and > separate accounts, and partnerships. You asked > for a few mutual funds that fit my criteria for > being a superior fund. Dimensional MidVal and > American Beacon SmCVl spring to mind, but there is > a very good chance I’m leaving out some other > badasses (like D&C Stock on the basis of long term > performance). It’s also hard not to favor > American Funds and Vanguard. Fidelity and TRowe > also have some excellent offerings, especially > with Fidelity moving into Vanguard country with > their new K-shares. > > RWT, what are your thoughts, and what prompted you > to inquire? i pick MFs for my job and i always want to know how people are screening for MFs. I would very much like to be able to analyze past risk/performance measures and if any of these meaures persist. meaning if a fund was in the top decile in information ratio for 3 years, does the mutual fund tend to stay in the top decile for the next 3 years? what statistics could be due to luck vs. skill? how to efficiently screen for soft data e.g. fund manager’s philosophy, compensation structure, amount of money he has in the fund, firm’s commitment to the strategy, how well trained are the analysts, etc.? it seems such a daunting task to be able to pick funds that will outperform.
I am currently an M&A analyst on my way to grad school. The CFA is pretty much something to challenge myself and fill up my resume. Though I have to say even if some think the CFA is not destined to M&A analysts, the curriculum have proven very handy in many of my assignments.
I’m in a similar postion to you MbobJ, except in Australia… Big 4, Qualified, working in Audit… Hopefully this extra “bow” will help get me to the front of the queue, not so many take CFA here is Aust… Man am I sick of auditing… Plus… now I have US GAAP stuck in my head from all this studying and I’ve forgotten half of IFRS…
I agree, it’s fascinating yet frustrating. It sounds like I could learn a lot from the work you’ve already put in. Perhaps we could continue this chat via email? hawgdriver@gmail.com cheers, hawg
good luck Dash, auditing is not fun, but its pretty good for the all round skills
I am an IT consultant for the last 7 years. I love finance and stock markets. Doing an MBA in Finance and now taking the CFA Level 1 exam in Dec. My brother is a hedge fund manager in HKG. He is really smart and started out from the beginning in Finance, whereas i went into Comp Science. Trying to complete Level 1 and 2 if possible before i complete MBA.