GMO Defends Active Managers’ Weak 2014 Performance

From all of the rationalizing we’ve been seeing recently, it seems like active equity managers have been having lots of uncomfortable conversations with their clients. The latest comes from Neil Constable, who leads quantitative research for GMO’s global equity team, and Matt Kadnar, a member of GMO’s asset allocation team, in their aptly named white paper ‘Is Skill Dead?’ “In today’s increasingly short-term-oriented investment culture, winning stock pickers are deemed to have exhibited superior foresight and brilliance while the losers have suddenly become idiots and are often shown the door. Reality is something quite different,” they write. While they make…