Therefore, as outlined in Covestor's investment philosophy, emerging managers with smaller asset bases are potentially better-positioned to provide outperformance. In fact, closet index funds with holdings very similar to the benchmark tend to underperform, mostly due to higher costs, according to academic research. Also, managers who take a more active approach tend to have a better chance of beating the index on a risk-adjusted basis.
Charts: All Star Charts
Photo credit: trackrecord
DISCLAIMER: All opinions included in this material are as of October 17, 2013 and are subject to change. Investment involves risk. Investors cannot invest directly in an index. Indexes have no fees. Past performance is no guarantee of future results.
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Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.
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