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Once a performance measurement problem has been found with a portfolio, how long does it usually take to fix it and turn a portfolio around?
FTF News posed that question and others to Raphael Stern, CFA, head of ETF Portfolio Management at Invesco, during the Performance Measurement Europe (PME) 2018 conference in London this past September. Stern also served as a panelist for the “Quantifying Portfolio Management” discussion, which took place during the second day of the conference.
“It depends on the severity of the problem,” says Stern, who oversees passive exchange-traded funds (ETF) strategies. “So, it could be that a benchmark is incorrect — for example, if your fund is too big to trade in-and-out right away, compared to the market size — it may be the best strategy is to actually make the correction over time” to mitigate the impacts of correcting a mistake. “But, then again, if it’s a smaller error, there’s no market impact, you want to correct it right way. Ideally that’s the perfect solution. You correct the problem the moment you see it, and the moment you’re sure there actually is a problem.”
CREDITS:
Videography and editing: Timothy Foster Photography & Film
Interview conducted by: Maureen Lowe, president and founder of Financial Technologies Forum (FTF)
Co-Producers: Sarah Hathaway, vice president, FTF and Eugene Grygo, chief content officer, FTF
- Read More:
- ETF strategies,
- Performance Measurement Europe,
- Performance Measurement Europe 2018,
- Raphael Stern,
- performance measurement