Boutique premium: Why it pays to think small

Smaller funds are better performers

clock • 3 min read
Gary Moglione of Momentum Global Investment Management
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Gary Moglione of Momentum Global Investment Management

There have been a number of academic papers that have examined the performance of funds managed by smaller 'boutique' investment houses versus the much larger 'asset gatherers'.

The outcome of these various studies is overwhelming: boutiques tend to be the better performers with a consistent performance premium across various asset classes, ranging from 0.23% to 0.62% per annum net of fees. As a fund selector who has worked for some of the world's largest and smallest asset managers - and having met with and analysed the portfolios of managers ranging from new fund launches to $50bn funds - I can provide some personal insight and views on the 'boutique premium'. Larger funds may underperform for a variety of reasons. Firstly, a manager of a large fund has ...

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