Bridging Financial Planning and Factor Investing with Northern Trust's Peter Mladina
Excess Returns
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The Importance of Manager Skill in Active Management
At Northern Trust, we download the entire universe of not just fun returns, but SMA returns. We basically do ongoing manager screens and searches using these factor based analytics on an ongoing basis. 80% of what we're looking at or more roughly speaking is random. There is almost no evidence net of fee that active investment managers have been able to generate statistically significant, non random, risk adjusted alphas.
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