We begin 2017 facing a new paradigm and an ever more unpredictable world.
Markets are dislocating as the impact of a changed political and economic
direction in major regions begins to be felt and the benign monetary policy of
the past eight years is wound back. In this environment, the potential for
active managers to outperform is heightened and the reward for identifying
those managers most likely to do so should be greatly enhanced.
In June 2015, Chris Wagstaff, Senior Visiting Fellow at Cass Business School,
published the paper, 'Not all active managers are created equal - what to
look for and why', illustrating the merits of the best active
managers. Now, the changing external environment more than ever brings this
into sharp focus, with talented active managers well placed to take advantage
of the increases in volatility and lower stock correlations likely to ensue.
Indeed, this is exactly the environment that plays to the strengths of skilled
By applying the requisite due diligence, investors increase their chances of
finding exceptional active managers who can achieve desired investment
outcomes. This is especially true against the backdrop of social, economic and
political dislocation we face as 2017 unfolds.