This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. This material should be considered as general market commentary.
Our research suggests that fund managers who are willing to back their convictions with punchy bets tend to outperform over the long term.
There have been numerous studies looking at the different attributes that contribute to manager outperformance, ranging from simplistic momentum strategies (Jegadeesh and Timan, 1993), to the quality of the managers education (Chevalier and Ellison, 1999). However, there seems to be a growing body of work that suggests that the concentration of a manager’s portfolio has a significant effect on the relative performance delivered by the manager.
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