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Skill or luck? The role of strategies and scenario analysis as a competitive differentiator for fund management firms

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  • Jem Tugwell

    (Jem Tugwell Associates Limited)

Abstract

This article argues that plausible and provable market differentiation for a fund management firm can only be delivered via a strategy and scenario-centric investment approach. By facilitating correct and repeatable decisions across multiple funds, firms can demonstrate a transparent and efficient investment process, implemented via skill centres that add positive returns. The emphasis is on differentiating good luck from skill, proving that the underlying decisions contribute to the ultimate performance. The article challenges the conventional view of traditional performance attribution approaches, and illustrates the options for implementing a fundamentally more logical, measurable process.

Suggested Citation

  • Jem Tugwell, 2011. "Skill or luck? The role of strategies and scenario analysis as a competitive differentiator for fund management firms," Journal of Asset Management, Palgrave Macmillan, vol. 12(4), pages 281-291, September.
    • Handle: RePEc:pal:assmgt:v:12:y:2011:i:4:d:10.1057_jam.2011.10
    DOI: 10.1057/jam.2011.10
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    References listed on IDEAS

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