Surveys improve transparency and allow us to retrospectively monitor the quality and consistency of the investment services we receive. But it’s the use of surveys of historic performance in the forward-looking manager selection decision that raises all the controversy.
The flaws are obvious: a sample of history is never an accurate indication of the future, in any context. Yet money still flows in large amounts out of bottomranked funds and into top-ranked funds and the investment industry remains vulnerable to the mercurial outcomes of these flawed samples. What follows is an attempt to briefly cover the many reasons survey information is a poor sample for future manager selection with reference to the contributed articles which follow.
This edition is wrapped up with a list of dos and don’ts when using surveys, expertly extracted from various contributions by Delphine Govender. We hope that this will assist the reader to argue for and against the value of surveys and to hold lightly to their use in manager selection.
