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Client inspired research

The first in a series of papers addressing interesting questions posed by Inalytics’ clients; Nick Greenwood, Pension Fund Manager of The Royal County of Berkshire Pension Fund asked:

“Do highly concentrated portfolios perform better than more diversified ones?”

A portfolio strategy where risk and skill play a key role, our investment behaviour analysis seeks to look beyond the data to provide possible rationales for the observations.

What data have Inalytics used in the analysis?

Using the Inalytics Peer Group database, in this study we analysed some 599 equity portfolios with a wide variety of mandates; providing us with the opportunity to investigate interesting investment skill topics such as this.

The database was divided into quartiles, based on the number of holdings (average of each portfolio’s month end numbers). We then investigated the relationship with the subsequent performance of the portfolio.

 

Download the full research paper below to see the results of our findings and learn more about whether a highly concentrated portfolio is more likely to perform well.

If you would also like to suggest a topic of general interest, please contact us and we would be delighted to see if we could investigate it.

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