So as most of you are all aware, returns for traditional long only AM has been depressed over the last couple years. Much of this is due to the fact that the factors that propelled outsize returns over the past 4 decades or so (declining interest rates, trade globalization, and a huge expansion of credit) have already been played out, and they can only be played one time to this extreme level of effect.
In addition, the overall number of companies in the US stock market has shrunk drastically; in 1997, there were 6364 publicly listed US companies. As of 3Q16, there were 3267. The issue here is that even if there is far more capital in aggregate in long only funds and the pie is getting bigger, the slices that each of these large funds have of the alpha generated gets smaller and smaller. Especially with less companies to invest in than before, it is difficult for traditional outperformers to pursue unique strategies as there are simply less options available to all investors.
For more you can check
Asset Management Video
|
