Are vanguard's managers good stock-pickers or style-pickers?


Journal Article

Jared Kizer's article in the Winter 2005 issue indicates for Vanguard's managed funds that the return to stock-picking skill is not enough to offset the additional transactions costs of a managed portfolio. Thus, the superior performance of Vanguard's managed portfolio was due entirely to its tendency to overweight small stocks and value stocks relative to the index portfolio during a period when stocks with these two characteristics outperformed the market. So, it is style-picking skill rather than stock-picking skill that leads to the superiority of the managed portfolio in this particular instance. Similarly, style-picking skill explains the lower risk for the managed portfolio.

Full Text

Duke Authors

Cited Authors

  • Reinker, KS; Tower, E

Published Date

  • January 1, 2005

Published In

Volume / Issue

  • 31 / 3

International Standard Serial Number (ISSN)

  • 0095-4918

Digital Object Identifier (DOI)

  • 10.3905/jpm.2005.500367

Citation Source

  • Scopus