Join NexChange - the professional
network for the financial services
industry - and receive a free one-
year subscription to Forbes
Advisors Find a Road Less Traveled in Fixed Income
By Advisor Perspectives
Experienced investors know they can’t control what the market is going to offer. While it’s not unusual to find an asset manager targeting a specific return, actually achieving that goal is sometimes as much a matter of luck as skill. The simple fact is that no one, not the best stock picker or bond buyer in the world, can accurately predict returns in one year, let alone consistently year-over-year – no one knows the future. There has to be a better way for individuals and advisors to select the managers with whom they entrust their financial well-being.
There is a small but growing community of advisors who are leaving behind the old ways of picking managers in an effort to give their clients something they can’t get on their own or from a robo-advisor. These advisors pay as much, if not more, attention to potential risks as they do to potential returns. After all, fund managers invest in risks, not returns, when they select the securities in a fund, even if they are just rebalancing an index. Returns are nothing more than the result of a portfolio’s risk selection, whether deliberately chosen or passively accepted.
Read more at Advisor Perspectives.
Photo: Investment Zen