Lance: Stop focusing on short-term performance

STOP SHORT TERM FOCUS

RWC Partners' Ian Lance hits out at the short-term mindset currently plaguing the industry.

The asset management industry has a tendency to concentrate on short-term performance with fund managers' returns frequently measured over a month, a week or even a day. Positive short run returns are often used as evidence that a fund manager is ‘skilful' and are extrapolated in to the future. The same is true of poor short-term returns, which are attributed to bad judgement rather than bad luck. When asked whether they want their fund manager to slavishly follow the crowd or to take a contrarian view, I suspect most investors would opt for the latter. They fail to realise, howeve...