"He (the sailor) knows that he will not follow a straight line; the changing winds alone will not allow for that. Instead, he will travel in zigzag-like pattern." The Toilet Paper Entrepreneur, Mike Michalowicz
As discussed in our commentary last quarter, ‘Anchors Aweigh!’, the choice of a neutral asset allocation is a key factor in determining the overall range of outcomes, but tactical decisions and stock selection also play a key part in the final outcome.
The actual PCI results for Q2 for Sterling investors show that managers have exceeded our expectations, likely through a combination of being tactically overweight in risk assets and judicious stock selection.
In our commentary this quarter, we examine the role of momentum and skill and after many years in which a passive approach may have offered equal or superior performance to an active one, evidence from 2018 suggests that discretionary managers are delivering tangible value added.