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OT: American Politics

Preston said:
I will say, that is by design. There is little point to build a product that has the same risk profile as spy but is trying to beat it. So many (not all) fund managers are built to have 60-80% of the upside of spy and aim for maybe 50% of the downside. The fund manager that I know crushed spy in 2022. Absolutely annihilated it. But has underperformed since. So that's a 2-1 loss for him in the last 3 years, but actual returns are similar overall since 2022.
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Comparison vs market over the pay few years is a distorted view, too, given the unprecedented wealth generation fed largely by a crazy run (especially over the past 3 years) on the mag 7 stocks. easy to say just invest in tsla, alphabet, ms, etc but fund mgrs (prudently) need to diversify n
 
mbow30 said:
Comparison vs market over the pay few years is a distorted view, too, given the unprecedented wealth generation fed largely by a crazy run (especially over the past 3 years) on the mag 7 stocks. easy to say just invest in tsla, alphabet, ms, etc but fund mgrs (prudently) need to diversify n
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Their underperformance goes back beyond the past 3 years.

If you want to be fair to them, you could say their job is to reduce your folio’s volatility which will reduce returns in super bull years
 
zeke said:

View: https://x.com/NewsWire_US/status/1897026905066627127
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Fuck, they sure did decline quickly.


636426722341758141-AP-FILM-REVIEW-BLADE-RUNNER-2049-94280041.JPG
 
CH1 said:
Their underperformance goes back beyond the past 3 years.

If you want to be fair to them, you could say their job is to reduce your folio’s volatility which will reduce returns in super bull years
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Ya you hit on the main point with the second bit there. Most fund managers believe that the s&p 500 is actually too risky for them to sell to their clients. They intentionally build products that, in a bear market, fall half as much. You lose some upside, but you help your clients sleep at night, which has always been a major selling point. If they wanted the s&p 500 they'd just buy spy or a vanguard product like vti and call it a day.

Now in saying that, there are plenty of products that try to compete with s&p and share the same risk profile and fail miserably. And other products that are meant to be even more volatile with a bunch of shit stocks (Hi Cathie Wood). But the vast majority have different purposes and risk profiles so I'm not sure s&p is even the right benchmark for them.
 
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