Peter Fitzgerald

“Mean reversion can be a powerful force. An underperforming asset can undergo a strong period of outperformance as it ‘catches up’ with other areas of the market. This is, however, not always the case when it comes to manager performance. Managers whose style has been out of favour can get caught into chasing a rising market or changing styles. This leaves fund selectors in a difficult position. The key is to understand if the manager has changed styles or not. This is sometimes not so easy and at times it is necessary and indeed prudent to remain with underperforming managers.”