{"id":1995141,"date":"2014-06-25T17:09:48","date_gmt":"2014-06-25T11:39:48","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=1995141"},"modified":"2014-09-09T12:01:07","modified_gmt":"2014-09-09T06:31:07","slug":"themes-smart-beta","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2014\/06\/25\/themes-smart-beta\/","title":{"rendered":"Themes and Smart Beta"},"content":{"rendered":"<p>From Research Affiliates&#8217; <em>Slugging It Out in the Equity Arena<\/em>:<\/p>\n<h3>The Gap<\/h3>\n<p>There is a huge gap between reported mutual fund performance and the returns actually earned by the average investor. The gap \u2014 the difference between the fund\u2019s total time-weighted return and the average investor\u2019s money-weighted return \u2014 reflects the value added (or subtracted) by investors\u2019 decisions to move cash into and out of funds. In other words, the gap is the return impact of investors\u2019 market timing decisions.<\/p>\n<p>Over the past 10 years, the average investor earned a return that was 2.5% worse than the return of the average fund they invested in!<\/p>\n<h3>Procyclical vs. Countercyclical<\/h3>\n<p>Smart beta strategies &#8211; <a href=\"http:\/\/stockviz.biz\/Themes\" target=\"_blank\">Themes<\/a> &#8211; are countercyclical, periodically rebalancing out of winning stocks and into losers. They may underperform for extended periods but they ultimately tend to prevail.<\/p>\n<p>Investors\u2019 procyclical behavior, selling recent losers and buying recent winners, pays for the long-term value added by Themes.<\/p>\n<p>Source: <a href=\"http:\/\/www.researchaffiliates.com\/Our%20Ideas\/Insights\/Fundamentals\/Pages\/Slugging-It-Out-in-the-Equity-Arena.aspx\" target=\"_blank\">Slugging It Out in the Equity Arena<\/a><\/p>\n<p>To see how Themes have performed, follow the trail: <a href=\"http:\/\/stockviz.biz\/tag\/theme\/\" target=\"_blank\">http:\/\/stockviz.biz\/tag\/theme\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>From Research Affiliates&#8217; Slugging It Out in the Equity Arena: The Gap There is a huge gap between reported mutual fund performance and the returns actually earned by the average investor. The gap \u2014 the difference between the fund\u2019s total time-weighted return and the average investor\u2019s money-weighted return \u2014 reflects the value added (or subtracted) &hellip; <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471,9],"tags":[],"class_list":["post-1995141","post","type-post","status-publish","format-standard","hentry","category-investing-insight","category-your-money","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1995141","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=1995141"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/1995141\/revisions"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=1995141"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=1995141"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=1995141"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}