The Facts They Don’t Want You to Know

[Owlet]

"What have Bill Gross, John Paulson, Anthony Bolton and Bill Miller all got in common? They are all ‘rock star’ fund managers who have fallen on hard times more recently. Life in the fund management industry is not what it used to be like. Life is tough even for the supremely skilled. Markets are changing, fund managers are struggling to adapt and clients are growing restless as a result.

If I told you that the composition of an average UK equity fund changes by 90% a year, would that startle you? How would you feel if I added that the 20 funds with the highest turnover returned just 4.7% to investors in the 3 years to the end of March 2011 whereas the 20 funds with the lowest turnover returned 16.8% over the same period?

From the same source: Out of 1,230 funds across 12 different strategies, only 35 fund managers produced a performance consistent enough to earn their fund a place in the top quartile in each of the last three years (upper half of chart 1). In a universe of 1,230 funds, over a three year period and completely disregarding skill, the expected number of funds consistently ranked in the top quartile is 1,230*0.253=19.22."

link - CreditWritedowns

[Scuba]

1. What's really weird? Republicans think these guys are over-regulated. n/t

[Warpy]

2. End game!

They've sucked everything out of the system that they can using legal and (for the offshore funds) illegal means. The big gains their wealthiest clients have demanded since they got spoiled by the go-go stock market of the late 90s are just not coming. Even using maximum financial chicanery, they're dropping to historical rates of return.