Using Active Share to Deliver Better Equity Portfolios

Active Share is a relatively recent innovation in investment analysis and, unlike many innovations in the investment world, one that we believe enhances the investment process. We use Active Share to quantify how “active” active managers really are, what level of fees are appropriate to pay those managers, and ultimately, we believe, to recommend better portfolios for our clients.

Five Common Mistakes 401(k) Plan Sponsors Make

It is probably no surprise that a Google search of “investor mistakes” yields 30,500 results, while a search of “plan sponsor mistakes” yields only 53. The financial media typically focus on errors made by 401(k) plan consumers rather than those made by its architects—the plan sponsors. However, plan sponsors can encounter pitfalls similar to individual investors when it comes to designing

Realism in Forecasting

Readers of our 2013 Capital Market Assumptions will note that our return expectations are in many cases lower than the expectations that our consultant peers publish. We are aware that our assumptions are different from the crowd, but we believe that our assumptions are more grounded and realistic than those published by the majority of our peers.

2013 Capital Market Assumptions

Presenting Sellwood Consulting’s 2013 Capital Market Assumptions.

Our forward-looking assumptions are the primary input for our asset allocation work for clients, being the input variables for mean-variance optimization, monte carlo analysis, and risk budgeting.

Historical Perspective on Prospective Returns

A number of recent articles and research pieces have caught our eye, reinforcing our belief that forward-looking returns will be challenged by current low yields in marketable asset classes — low dividend yields in equities, and low coupon yields in fixed income.

A recent article from Buttonwood’s column in The Economist, “Home on the Range,” is a cogent summary of a recent study by Standard Life Company. The article notes,