Does investment skill exist? If so, what is investment skill? Traditionally, market participants and commentators have hunted for evidence of investment skill in industry wide databases of track records. This flawed approach has proved inconclusive and cast further doubt.
Inalytics uses analytic tools to examine and interrogate transaction data to help determine whether alpha has been generated through luck or skill. We use sophisticated tools and methods in much the same way as elite athletes use them to examine and improve performance.
We started by using Inalytics Peer Group Database of some 389 equity portfolios, part of a broader database that has been built up over the last 8 years and comprises over 100 million institutional investor decisions.
In our latest research paper we look to understand investment skill by analysing the investment process, decision making and strategy alongside performance, at the same time avoiding reliance on historic track records.
Download the full study to learn more about how we go about identifying investment skill or contact us to learn more about how we analyse portfolios and decision making to improve the investment process and help select skilful portfolio managers.