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Hedge Fund Manager Paul Singer Doesn’t Think Benchmarking Is Useful (HedgeFund Intelligence/Absolute Return)
Paul Singer CEO of hedge fund Elliot Management Corporation thinks benchmarking isn’t useful. In an investor letter he wrote, “the fact is that sometimes when we outperform another fund, their results should actually be viewed more favourably than ours because we should have done even better, and sometimes the opposite is true.
“But as much as we sympathize with investors who want a basis for understanding when their managers are doing well or not, benchmarking is not helpful to us. We are proud of our very long-term consistent results obtained with an extremely low variability of return. That result is what really counts — not what the other person is doing.”
How Advisors Can Help Wealthy Families With Estate Planning (The Wall Street Journal)
There’s often a gap between what high-net-worth family enterprises want from their estate planners and that they get, writes Amy Renkert-Thomas of Connecticut-based Withers Consulting Group in a WSJ column. There are a few things advisors can do to help bridge the gap.
“First, understand a client family’s DNA — not all families are the same. Advisers should start by talking about a family’s mission and values, as well as the different attitudes and intentions of family members. It’s also important to determine how individual family members differ in their involvement with the family enterprises.
“…There are also pieces of the estate planning puzzle specific to ultra-high-net-worth families. For example, some families use a lot of trusts and they don’t always have the time to choose trustees effectively. So it’s important to educate and help families think through their criteria for trustees.”
Why Investors Should Care About Mutual Funds Dropping Managers ‘At An Alarming Clip’ (U.S. News & World Report)
Mutual funds are shaking up their management teams and dropping managers “at an alarming clip” writes Ron Silverblatt at U.S. News and & World. And mutual fund investors should care about the shake-up, according to Silverblatt. “First, a new manager can mean a change in a fund’s strategy, which in turn can mean that a product that was once a good fit for an investor no longer belongs in that investor’s portfolio.”
“On top of that, management has everything to do with fund performance. He points out a 2010 report by the United Kingdom’s Pensions Institute which found “losing a top-decile manager results in a 1.44 percentage points lower performance in the following year compared with winner funds that keep their star manager.”
The VIX index which measures market volatility has declined in recent weeks. But BlackRock’s Russ Koesterich thinks volatility will rear its ugly head again for 4 key reasons.
1. September has historically been the worst month for stocks going back to 1896 and “this September swoon phenomenon extends beyond the United States.” 2. “Anxiety over Fed tapering is likely to climb as we approach the Fed’s September meeting. 3. “”Europe is likely to re-emerge as a source of volatility as Germany holds an important federal election in September. 4. The U.S. budget debate will pick up steam again.
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