Boutique funds outshine counterparts
Boutique fund managers have made a comeback after a post-global financial crisis slump, having outperformed their non-boutique counterparts as well as indices over the past 20 years.
Such was the finding of a study by global asset management company, AMG, which showed the average boutique beat the non-boutique in nine out of 11 equity product categories by an average annual 51 basis points.
Compared to primary indices, the average boutique strategy overtook its primary index in nine of 11 product categories by an average annual 141 basis points after fees.
Furthermore, top-decile boutique strategies added 1133 basis points while the top-quartile boutique strategies added 589 basis points on an average annual basis after fees compared to their primary indices, AMG executive vice president Andrew C Dyson said.
"In addition, top-performing boutiques added 55 basis points more value than poorly performing boutiques detracted on an annual basis, illustrating that these strong returns were not simply a function of higher risk," Dyson said.
Primary indices used for comparison in the study included the MSCI Emerging Markets, MSCI World, and the S&P 500 among others.
The study gathered data from more than 1200 investment management firms around the world and nearly 5000 institutional equity strategies with around $7 trillion in assets under management.
It looked at rolling one-year returns for the 20-year period ending December 31, 2014 across 11 institutional equity product categories on a strategy-by-strategy basis.
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