18% of fund managers make the right decision 'most' of the time

Findings from new tool deemed "a sea-change" for the industry

Elliot Gulliver-Needham
clock • 2 min read

Only 18% of fund managers make the correct decision a majority of the time, according to a new research paper by Essentia Analytics.

The Essentia behavioural alpha benchmark, which launched yesterday (15 September), uses propriety analysis to attempt to assess portfolio managers on their decision making skills, rather than their recent past performance, which is "highly subject to the random effects of luck". This tool incorporates seven key metrics to assess fund managers: stock picking, entry timing, sizing, scaling in, size adjusting, scaling out and exit timing. The paper found that most managers got their decisions wrong most of the time. Only 18% made decisions that added value a majority of the time, and the...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Stock market crashes – the rational and the emotions

Stock market crashes – the rational and the emotions

'Several characteristics associated with previous pre-crash periods are present today'

Paul Wood
clock 30 September 2026 • 5 min read
Baillie Gifford workforce faces 10% reduction following voluntary exit programme

Baillie Gifford workforce faces 10% reduction following voluntary exit programme

Around 160 roles vacated

clock 23 September 2026 • 1 min read
Nine SJP funds flagged for underperformance in AoV despite improvements on last year

Nine SJP funds flagged for underperformance in AoV despite improvements on last year

89% of assets given green light

Alex Sebastian
clock 22 September 2026 • 2 min read