{"id":2757,"date":"2016-06-02T11:11:36","date_gmt":"2016-06-02T15:11:36","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=2757"},"modified":"2016-06-02T11:11:36","modified_gmt":"2016-06-02T15:11:36","slug":"a-comment-on-active-management","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2016\/06\/02\/a-comment-on-active-management\/","title":{"rendered":"A COMMENT ON ACTIVE MANAGEMENT"},"content":{"rendered":"<p><em>Robust asset growth in passive portfolios is ascribed to active managers\u2019 inability to earn higher post-fee returns. We have long attributed this to benchmark composition which has overcome the placement of valuation in the make-up of the benchmarks: simply, large firms with strong market shares whose products and services drive superiority of credit, cash flow, and return on capital compared to the investment universe at large. Under similar and reasonable logic, the CT Capital portfolio, whose firms are of higher credit, generate stronger (operating and free) cash flows per investment dollar, with higher return on capital than the benchmarks, should consequently outpace this hurdle rate over the cycle<\/em><\/p>\n<p>The growth in \u201csmart beta\u201d products, which has so captured investor and consultant imagination deploys naively constructed metrics, is substantially inferior to the CT Capital worksheets, and would never be considered by credit agencies, bankers, and potential financial acquirers as compelling proof of worth or ability to satisfy claims<\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2016\/06\/02\/a-comment-on-active-management\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p><div class=\"tweetthis\" style=\"text-align:left;\"><p> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=A+COMMENT+ON+ACTIVE+MANAGEMENT+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D2757\" title=\"Post to Twitter\"><img decoding=\"async\" class=\"nothumb lazyload\" data-src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" \/><noscript><img decoding=\"async\" class=\"nothumb\" src=\"http:\/\/www.credittrends.com\/blog\/wp-content\/plugins\/tweet-this\/icons\/en\/twitter\/tt-twitter.png\" alt=\"Post to Twitter\" \/><\/noscript><\/a> <a class=\"tt\" href=\"http:\/\/twitter.com\/home\/?status=A+COMMENT+ON+ACTIVE+MANAGEMENT+https%3A%2F%2Fwww.credittrends.com%2Fblog%2F%3Fp%3D2757\" title=\"Post to Twitter\">Tweet This Post<\/a><\/p><\/div><!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Robust asset growth in passive portfolios is ascribed to active managers\u2019 inability to earn higher post-fee returns. We have long attributed this to benchmark composition which has overcome the placement of valuation in the make-up of the benchmarks: simply, large firms with strong market shares whose products and services drive superiority of credit, cash flow, [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n<p class=\"facebook\"><a href=\"http:\/\/www.facebook.com\/share.php?u=https:\/\/www.credittrends.com\/blog\/2016\/06\/02\/a-comment-on-active-management\/\" target=\"_blank\" title=\"Share on Facebook\">Share on Facebook<\/a><\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2757","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/2757","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/comments?post=2757"}],"version-history":[{"count":1,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/2757\/revisions"}],"predecessor-version":[{"id":2758,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/posts\/2757\/revisions\/2758"}],"wp:attachment":[{"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/media?parent=2757"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/categories?post=2757"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.credittrends.com\/blog\/wp-json\/wp\/v2\/tags?post=2757"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}