Insuring against the unpredictable

MUNDY'S MOMENT

One of the questions we are most commonly asked when marketing is this: ‘Why do you not use a view on major economic statistics to determine the shape of your portfolio?'

Sometimes it is a touch more incredulous: ‘How on earth can you manage a fund without an economic view?' Perhaps we should consider it a compliment these people think we have such a clear view of the future worth inflicting it on their clients. As much as I hate to disappoint them, we have no such view. The reason for this is clear: We have no competitive advantage in this area and, without a competitive advantage, one is destined to underperform. (Incidentally, we are not alone here. Although I have never carried out a survey, I would guess the list of those economists with great for...