IFIA: CEO roundtable – more genuine alpha products need to be developed
Fri Sep 14, 2012
More investment products need to be developed that actually
achieve an absolute return, according to Jeffrey Sargent from
bond specialist asset manager Pimco.
The executive vice-president Pimco Europe told the Irish Funds
Industry Association earlier this week during a CEO
roundtable that, prior to the financial crisis, much of the
product available had been traditional benchmark-based
investments - where asset managers would try to produce alpha
in excess of whatever the benchmark was.
He said: "Unfortunately, over an extended period of time, not
only [did] benchmarks produce negative returns but often the
alpha component [of the fund] was also producing negative
"So this has created a great deal of fear and risk aversion in
the marketplace and caused investors to rethink [whether] they
have the tolerance for the type of volatility and extended
period of below-expectation returns to get through a
"We have then seen much broader...
ISSN: 2151-1845 / CDC10004H
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