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Asset Managers: Institutional Performance and Smart Betas / Joseph Gerakos, Juhani T. Linnainmaa, Adair Morse.

NBER Working papers Available online

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Format:
Book
Author/Creator:
Gerakos, Joseph.
Contributor:
National Bureau of Economic Research.
Linnainmaa, Juhani T.
Morse, Adair.
Series:
Working Paper Series (National Bureau of Economic Research) no. w22982.
NBER working paper series no. w22982
Language:
English
Physical Description:
1 online resource: illustrations (black and white);
Other Title:
Asset Managers
Place of Publication:
Cambridge, Mass. National Bureau of Economic Research 2016.
Summary:
Using a dataset of $17 trillion of assets under management, we document that actively-managed institutional accounts outperformed strategy benchmarks by 86 (42) basis points gross (net) during 2000-2012. In return, asset managers collected $162 billion in fees per year for managing 29% of worldwide capital. Estimates from a Sharpe (1992) model imply that their outperformance comes from factor exposures ("smart beta"). If institutions had instead implemented mean-variance portfolios of institutional mutual funds, they would not have earned higher Sharpe ratios. Recent growth of the ETF market implies that asset managers are losing advantages held during our sample period.
Notes:
Print version record
December 2016.

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