Dette gjør Storbritannias folkeavstemning dobbelt spennende. Vil United Kingdom bestå som en enhetlig stat på mellomlang sikt og hva blir – på den ene side – britene nye rolle? Men minst like viktig er det å se – på den andre siden – at også hele det gjenværende EU vil bli sterkt endret uten britene. De 27 må stikke ut en ny kurs.

En britisk utmarsj vil frata EU det medlem som sitter med den største internasjonale erfaring, fra kolonitiden og i dag fra rollen som Europas eneste globale finanssentrum. En av EUs to atommakter og en av EUs to veto-makter i FN vil forlate det europeiske samarbeidsprosjektet EU. Militært ligger britene foran Frankrike i erfaring og utrustning, og de har et renommé som dyktige diplomater.

Vi vet allerede at en mulig britisk utmeldelse fra EU vil utløse omfattende, kompliserte og langvarige og – må vi anta – harde forhandlinger om juridiske, økonomiske og politiske spørsmål. Motparten vil være et rest-EU som vil stå midt inne i sin egen ny-orientering.

I et historisk perspektiv vil det være interessant at EUs eneste virkelig seiersmakt under Den annen verdenskrig vil gå ut. For EU er i virkeligheten er krigs-tapernes forbund, et politisk eksperiment med to mål: Å unngå nye kriger – og å gjenvinne noe av Europas internasjonale tyngde. Blant de krigførende europeiske stater under siste verdenskrig var det bare tre som ikke fikk sine hovedsteder okkupert av en motstander – Moskva, London og Helsinki. Alle andre ble valset ned, minst en gang.

Thatcher forsonet seg aldri

Dette ligger dypt nede i hodene og utgjør en del av EU-samarbeidets psykologiske bakteppe. Og vi kan spørre oss om ikke Tysklands pregende politiske rolle i EU de siste seks årene – med euro-krise, Ukraina, flyktninger – har underbygget et britisk ønske om å forlate EU. Motviljen mot å delta i et forpliktende samarbeid der Tyskland er den sterkeste partner – på grunn av folketall og økonomi – er kanskje enda litt sterkere hos britene enn hos andre EU-partnere. Britene hadde sin «finest hour» da de stod alene fra 1939 til 1941, og de har dvelt ved dette i alle tiår som fulgte.  Statsminister Margaret Thatcher forsonet seg aldri med den tyske gjenforeningen etter Berlin-murens fall i 1989. Samtidig har det engelsk-tyske dag-til-dag-samarbeid i EU vært meget godt, med hovedvekt på frie markeder og åpen handel – og en kamp mot franskmenns og andres tradisjon for en tydeligere statlig rolle i næringslivet.
Det er interessant at det lille som har lekket ut om drøftelser mellom EU-land om hva de bør gjøre hvis UK går ut, har konsentrert seg om en sterkere militær rolle for EU. For første gang siden gjenforeningen øker Tyskland nå sine militære styrker. I Middelhavet og i farvannene mellom Hellas og Tyrkia demonstrerer EU sin hjelpeløshet. Her trer NATO til, for EU er i dag ikke i stand til å sikre sine yttergrenser.

Skulle britene gå ut, er den mest sannsynlige reaksjon fra de gjenværende 27 en ny revisjon av EU-traktaten, med en klarere rolle for de enkelte nasjonalstater. Det vil være en tilpasning til de politiske realiteter i dagens Europa. Samtidig kan et fordypet samarbeid vokse frem, men da konsentrert om en «indre kjerne» som omfatter de opprinnelige medlemsland, pluss en håndfull andre.

Tungen på vektskålen

Helt siden romerne satte over Kanalen for 2000 år siden, har England vært en del – og en viktig del – av europeisk politikk og historie. Men britenes klassiske rolle har vært som en «tunge-på-vektskålen», som passet på at en enkelt makt ikke fikk oppkaste seg til rollen som  hegemon på kontinentet. Derfor var Frankrike den første rivalen, som ble erstattet av Tyskland etter at tysk samling i 1870-71 og sterk industrivekst gjorde landet til det dominerende på kontinentet. Her vek Englands ledere ikke tilbake for en krig – fra hertugen av Marlborough over Wellington, Lloyd George og frem til Churchill for årene 1940-45. Men denne klassiske rolle for britene, som «king-maker» i Europa, vil det bli nesten umulig å spille, hvis Storbritannia nå forlater et EU som fortsetter å utbygge sitt samarbeid.

Det som også har kjennetegnet britene i Europa er deres pragmatiske – nesten ikke-ideologiske – holdning til politiske spørsmål. Derfor har det rent praktiske samarbeidet gått meget bra. Men britene har vegret seg mot større og langsiktige politiske prosjekter, slik de faller naturlig for franskmenn – med deres forkjærlighet for logiske og prinsipielle tankebygninger – og for tyskerne med deres tradisjon for overordnede og samlende planer. For det som på tysk kalles «Gesamtkonsept».

Rollebytte for Norge

Som medlemmer av EU gjennom 43 år har britene kjempet for åpne markeder, for så mange EU-medlemmer som mulig og for minst mulig fordypning. Men de har ikke lagt frem noen alternativ plan for et samarbeidende Europa etter krigen. Det ligger ikke deres tradisjon for politikk. Vi så det sist da statsminister David Cameron i vinter kom tilbake fra harde forhandlinger i Brussel med sin «pakke» for et endret forhold til EU. Han snakket kun om hva han hadde oppnådd av praktiske endringer – det var ikke mye – og han luftet ingen visjoner for det fremtidige samarbeidet i Europa. Kanskje kan vi se det slik at EU-medlemskapet for britene har vært et politisk forsvarsprosjekt – «a rear guard action» – for å kontrollere eller bremse andre. Og spesielt tradisjonelle konservative politikere føler at de nå bør dra i nødbremsen, overfor et EU som både ligger til venstre politisk og er åpen for mer samarbeid.

For Norge vil et Storbritannia på utsiden av EU skape komplikasjoner, med behov for en egen handelsavtale og en revisjon av mange EØS-bestemmelser som kopierer EUs egne regler. Gjennom 200 år har Storbritannia og Tyskland vært de to viktigste europeiske stormakter for Norge. For handel og skipsfart dominerte britene, med London som den avgjørende økonomiske og finansielle metropol – helt frem til i dag. Og de politiske impulsene kom derfra, med en sterk britisk demokratisk tradisjon som forbilde for Norge.

Fra Tyskland hentet Norge de viktigste kulturimpulsene, for en romantisk nasjonal tradisjon, for kunstnere og musikere, for gruvedrift og oppbygging av universitetet i 1811 og senere for tekniske høyskoler. Politikken var mindre viktig. Krigen med tysk okkupasjon gjorde Storbritannia til en så tett alliert at Oslo overveiet å søke om opptak i Commonwealth. Men i løpet av de siste tiårene har vi sett et rollebytte: Engelsk språk og populærkultur dominerer i Norge og forskerne ser mot UK og USA. Men samtidig er Tyskland blitt den viktigste politiske partner for Norge i Europa, på tross av vårt ikke-medlemskap i EU. Både Jens Stoltenberg og Erna Solberg har lagt sine første utenlandsbesøk som statsministre til Berlin, for å markere en nærhet. Og tyske topp-politikere har vært jevnlig i Norge, mens det har gått en generasjon mellom hvert britisk statsministerbesøk i Norge.

I dag er EU viktigere for Norge enn nabolandet over Nordsjøen. Skulle britene ta avskjed med EU, vil også Norges samarbeid med Storbritannia bli langt mer komplisert.

 

Av Nils Morten Udegård

Nils Morten Udgaard er tidligere utenriksredaktør i Aftenposten og har vært avisens korrespondent i London, Moskva og Bonn/Berlin. Han var statssekretær for utenrikspolitikk hos statsminister Kåre Willoch 1984-1986, g professor II ved Universitetet i Bergen 1991-1997. Han har en doktorgrad i internasjonal politikk fra London School of Economics.

 

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Del innlegget:

The thinking behind my article was that they had taken a piece of academic research and tried to twist the findings to suit their own ends. I’ll be the first to admit that my own thinking is biased and I probably look for justification for my thinking in articles and papers I come across – it’s a well known behavioural bias. I’d also like to think that I can be open to changing my thinking – I know I’ve had to be many times throughout my career. It’s therefore interesting to read something I wrote six years ago and reflect as to whether I have come across anything subsequently which may have caused me to question what I wrote. The answer is a resounding no!

I stand by the following article as I feel it properly reflects the conclusions of the papers mentioned. I’d also like to point out that I was spot on with a prediction: ‘As we move forward perhaps other methods of gaining specific risk exposures will emerge allowing investors to move further away from active management’ but will claim no predictive capability but that I got lucky based upon a reasonable expectation as to what might happen.

One has to admire the pluck of Christophe Boucher and Bertrand Maillet in their article entitled ‘Case for active management is actually strong’ (FTfm May 3). Eloquently, they tried to twist the facts to suit their purpose of claiming that investors still receive real benefit from active managers. Most surprising was their citing of the 2008 Study False Discoveries in Mutual Fund Performance by Laurent Barras, Olivier Scaillet and Russ Wermers.

Whilst there is some encouragement for active fund managers in the study, as noted by Pauline Skypala, FTfm editor, back in October 2009 (Active managers: lucky, skilful or useless?) that same article also correctly stated that the study showed “only a vanishingly small proportion [of managers] (0.6 per cent) delivered positive alpha through skill”. Do Mr Boucher and Mr Maillet really think investors should rely on active managers having that most elusive of resources – luck?

Indeed they would be well advised to heed the words of one of the study’s authors, Mr Wermers, quoted in an article in the New York Times in July of 2008 stating: “The number of funds that have beaten the market over their entire histories is so small that the False Discovery Rate test can’t eliminate the possibility that the few that did were merely false positives,” or in other words lucky! As Mr Wermers said in an earlier article in the same paper: “By definition therefore, such a fund could not have been identified in advance.”

Rightly, Mr Boucher and Mr Maillet point out there are potential issues with investing in broad index funds based on the most well-known commercial indices. But what makes their case for active management even weaker is the fact that these indices, which are “somewhat arbitrary” and where “risk budgets and risk positions are not managed”, still outperform the vast majority of active managers year in year out.

Drawing on the experiences of Norges Bank and its management of Norway’s ‘Oilfund’, as it is commonly referred to, also strikes a further blow to the case for active management.

As has been mentioned in this paper previously, the fund’s use of active managers was analysed by Professors Ang, Goetzmann and Schaefer in a 220 page report. Given the fund’s resources and its time horizon one would suspect that if anyone has the opportunity to benefit from active management it would be this fund. The professors praised the extremely low cost burden on the fund (far below what any ‘normal’ investor could expect) but found that even with this advantage, the average active return from January 1998 to September 2009 was statistically indistinguishable from zero!

Interestingly, the professors also showed that the fund’s results are almost entirely explained by exposure to systematic risk factors rather than active management bets. The world of ‘passive’ investing has progressed from the ‘arbitrary’ state portrayed by Mr Boucher and Mr Maillet, allowing investors to target specific risk factors that they may wish to gain exposure to, such as size and value.

As we move forward perhaps other methods of gaining specific risk exposures will emerge allowing investors to move further away from active management. But we will surely never move to the state portrayed by passive management’s most ardent critics of everyone doing nothing but indexing. There will always be a substantial number of investors looking for the expensive thrill of active management allowing those of us who prefer a more prudent path to take the benefits.

To quote Mark Kritzman, lecturer in finance at the MIT Sloan School of Management, in a study from 2009: “It is very hard, if not impossible to justify active management for most individual, taxable investors, if their goal is to grow wealth.” Furthermore those who still insist on an actively managed fund are almost certainly “deluding themselves”.

Av: Richard Stott, Founding Partner, Connectum

Del inlägget:

The thinking behind my article was that they had taken a piece of academic research and tried to twist the findings to suit their own ends. I’ll be the first to admit that my own thinking is biased and I probably look for justification for my thinking in articles and papers I come across – it’s a well known behavioural bias. I’d also like to think that I can be open to changing my thinking – I know I’ve had to be many times throughout my career. It’s therefore interesting to read something I wrote six years ago and reflect as to whether I have come across anything subsequently which may have caused me to question what I wrote. The answer is a resounding no!

I stand by the following article as I feel it properly reflects the conclusions of the papers mentioned. I’d also like to point out that I was spot on with a prediction: ‘As we move forward perhaps other methods of gaining specific risk exposures will emerge allowing investors to move further away from active management’ but will claim no predictive capability but that I got lucky based upon a reasonable expectation as to what might happen.

One has to admire the pluck of Christophe Boucher and Bertrand Maillet in their article entitled ‘Case for active management is actually strong’ (FTfm May 3). Eloquently, they tried to twist the facts to suit their purpose of claiming that investors still receive real benefit from active managers. Most surprising was their citing of the 2008 Study False Discoveries in Mutual Fund Performance by Laurent Barras, Olivier Scaillet and Russ Wermers.

Whilst there is some encouragement for active fund managers in the study, as noted by Pauline Skypala, FTfm editor, back in October 2009 (Active managers: lucky, skilful or useless?) that same article also correctly stated that the study showed “only a vanishingly small proportion [of managers] (0.6 per cent) delivered positive alpha through skill”. Do Mr Boucher and Mr Maillet really think investors should rely on active managers having that most elusive of resources – luck?

Indeed they would be well advised to heed the words of one of the study’s authors, Mr Wermers, quoted in an article in the New York Times in July of 2008 stating: “The number of funds that have beaten the market over their entire histories is so small that the False Discovery Rate test can’t eliminate the possibility that the few that did were merely false positives,” or in other words lucky! As Mr Wermers said in an earlier article in the same paper: “By definition therefore, such a fund could not have been identified in advance.”

Rightly, Mr Boucher and Mr Maillet point out there are potential issues with investing in broad index funds based on the most well-known commercial indices. But what makes their case for active management even weaker is the fact that these indices, which are “somewhat arbitrary” and where “risk budgets and risk positions are not managed”, still outperform the vast majority of active managers year in year out.

Drawing on the experiences of Norges Bank and its management of Norway’s ‘Oilfund’, as it is commonly referred to, also strikes a further blow to the case for active management.

As has been mentioned in this paper previously, the fund’s use of active managers was analysed by Professors Ang, Goetzmann and Schaefer in a 220 page report. Given the fund’s resources and its time horizon one would suspect that if anyone has the opportunity to benefit from active management it would be this fund. The professors praised the extremely low cost burden on the fund (far below what any ‘normal’ investor could expect) but found that even with this advantage, the average active return from January 1998 to September 2009 was statistically indistinguishable from zero!

Interestingly, the professors also showed that the fund’s results are almost entirely explained by exposure to systematic risk factors rather than active management bets. The world of ‘passive’ investing has progressed from the ‘arbitrary’ state portrayed by Mr Boucher and Mr Maillet, allowing investors to target specific risk factors that they may wish to gain exposure to, such as size and value.

As we move forward perhaps other methods of gaining specific risk exposures will emerge allowing investors to move further away from active management. But we will surely never move to the state portrayed by passive management’s most ardent critics of everyone doing nothing but indexing. There will always be a substantial number of investors looking for the expensive thrill of active management allowing those of us who prefer a more prudent path to take the benefits.

To quote Mark Kritzman, lecturer in finance at the MIT Sloan School of Management, in a study from 2009: “It is very hard, if not impossible to justify active management for most individual, taxable investors, if their goal is to grow wealth.” Furthermore those who still insist on an actively managed fund are almost certainly “deluding themselves”.

By: Richard Stott, Founding Partner, Connectum

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Ok you know my starting point – the majority of the financial services industry is little more than a bunch of smooth talking, well dressed bullshit artists selling snake oil at anything up to 2&20 (the common term used to identify the ultimate performance bullshitters – hedge fund managers). If we were remaking a Western, the fund salesman would be the nattily dressed guy on a soapbox selling the latest cure for all the ailments known to man. So when the marketing wizzes, sitting in their Herman Miller chairs draw up their latest Powerpoint deck, they’re always looking for a fancy name or strap line to snare the unsuspecting, the gullible and the all too trusting. After all I’m buying a product from a mega bank what could possibly go wrong? Smart Beta is just one such term.

Can Smart Beta get you in trouble?

It has become the term used to describe what many for years knew as ‘factor’ investing. An approach which focuses on various return factors that academia has identified over the years which can help describe where the returns from a particular investment come from. Examples would include whether the size of a particularly company (its market capitalisation) whether it is a growth or a value stock, it’s profitability etc. Indeed when you include these factors into performance calculations it quickly becomes evident that a supposedly successful fund manager’s track record has less to do with his skill (alpha — which is mostly luck masquerading as skill anyway – just ask any fund manager to tell you how lucky he is and expect an embarrased laugh) in picking investments and more to do with the exposure to various factors within his fund. So the fund industry being nothing if not efficient at latching on to a money maker set up a whole raft of funds trying to take advantage of theses factors and has, I’ll admit on the whole, done a pretty decent job of it. After all security selection for these funds is straight forward, it can be done largely mathematically and thus is cost efficient so these funds are usually far cheaper than your average mutual fund (therein lies part of the secret – a cheap fund is likely to deliver better performance than an expensive one – time for Homer Simpson- DOH!). The problem has been that the fund industry as usual has been pushing funds with those factors that have done well – can we all say performance chasing? This issue was highlighted by Rob Arnot of Research Affiliates – an innovator and deep thinker in the world of investing – when he wrote a paper entitled ‘Can Smart Beta get you in trouble?’

Rob was not attacking in and of itself the idea of factor investing but highlighting the potential issues of seeing it as being a sure fire way to great performance. Ok at this point I’m going to declare our hand. We’ve been converts to the idea of factor investing for many years, starting back in 2004 so it’s nothing new. One of the things that we learnt when we were first introduced to it was not to expect to see ‘outperformance’ from any particular factor year in and year out. Academic studies showed that based on what we have seen historically that over time one should expect to see overall outperformance from exposure to certain factors such as small cap and value stocks but that these factors can have long periods of underperformance, as with the value factor in recent years.

So are these factors really that ‘smart’?

Not in my opinion. The academics who identified them are – in fact they’re some of the smartest finance minds around but these factors just are! They may give you periods of underperformance, they may give you periods of outperformance and on balance the evidence would suggest that over time you will get performance over and above what you would have had if you hadn’t have weighted your portfolio towards them. When are you going to get the outperformance? I haven’t a bloody clue and nor does anyone else. If they suggest they have they are a charlatan and a liar – take your money and run. Like anything they are something to take into account when taking a science based approach to constructing a portfolio but don’t bet the proverbial ranch on them because you might end up feeling like a bit of an idiot and not many of them are very ‘smart’ are they?

Av: Richard Stott, Founding Partner, Connectum

Del inlägget:

Ok you know my starting point – the majority of the financial services industry is little more than a bunch of smooth talking, well dressed bullshit artists selling snake oil at anything up to 2&20 (the common term used to identify the ultimate performance bullshitters – hedge fund managers). If we were remaking a Western, the fund salesman would be the nattily dressed guy on a soapbox selling the latest cure for all the ailments known to man. So when the marketing wizzes, sitting in their Herman Miller chairs draw up their latest Powerpoint deck, they’re always looking for a fancy name or strap line to snare the unsuspecting, the gullible and the all too trusting. After all I’m buying a product from a mega bank what could possibly go wrong? Smart Beta is just one such term.

Can Smart Beta get you in trouble?

It has become the term used to describe what many for years knew as ‘factor’ investing. An approach which focuses on various return factors that academia has identified over the years which can help describe where the returns from a particular investment come from. Examples would include whether the size of a particularly company (its market capitalisation) whether it is a growth or a value stock, it’s profitability etc. Indeed when you include these factors into performance calculations it quickly becomes evident that a supposedly successful fund manager’s track record has less to do with his skill (alpha — which is mostly luck masquerading as skill anyway – just ask any fund manager to tell you how lucky he is and expect an embarrased laugh) in picking investments and more to do with the exposure to various factors within his fund. So the fund industry being nothing if not efficient at latching on to a money maker set up a whole raft of funds trying to take advantage of theses factors and has, I’ll admit on the whole, done a pretty decent job of it. After all security selection for these funds is straight forward, it can be done largely mathematically and thus is cost efficient so these funds are usually far cheaper than your average mutual fund (therein lies part of the secret – a cheap fund is likely to deliver better performance than an expensive one – time for Homer Simpson- DOH!). The problem has been that the fund industry as usual has been pushing funds with those factors that have done well – can we all say performance chasing? This issue was highlighted by Rob Arnot of Research Affiliates – an innovator and deep thinker in the world of investing – when he wrote a paper entitled ‘Can Smart Beta get you in trouble?’

Rob was not attacking in and of itself the idea of factor investing but highlighting the potential issues of seeing it as being a sure fire way to great performance. Ok at this point I’m going to declare our hand. We’ve been converts to the idea of factor investing for many years, starting back in 2004 so it’s nothing new. One of the things that we learnt when we were first introduced to it was not to expect to see ‘outperformance’ from any particular factor year in and year out. Academic studies showed that based on what we have seen historically that over time one should expect to see overall outperformance from exposure to certain factors such as small cap and value stocks but that these factors can have long periods of underperformance, as with the value factor in recent years.

So are these factors really that ‘smart’?

Not in my opinion. The academics who identified them are – in fact they’re some of the smartest finance minds around but these factors just are! They may give you periods of underperformance, they may give you periods of outperformance and on balance the evidence would suggest that over time you will get performance over and above what you would have had if you hadn’t have weighted your portfolio towards them. When are you going to get the outperformance? I haven’t a bloody clue and nor does anyone else. If they suggest they have they are a charlatan and a liar – take your money and run. Like anything they are something to take into account when taking a science based approach to constructing a portfolio but don’t bet the proverbial ranch on them because you might end up feeling like a bit of an idiot and not many of them are very ‘smart’ are they?

By: Richard Stott, Founding Partner, Connectum

Share this: