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David, you've noted on this site the amount of research T. Rowe Price does on asset allocation (for example, with regard to its retirement-date funds, etc.). Is the amount and quality of their work something you can attest to based on, say, their marketing literature, or based on interviews with others or first-hand knowledge of the firm?
(That was actually my attempt on humor on a sort of tough morning.)
One evidence of asset allocation work comes from Morningstar's assessment of the glidepaths in the various firms' target-date funds. Morningstar rates Price as one of the best asset-allocators (along with, e.g,. PIMCO and GMO) and rate their target-date funds as "gold" across the board. See http://news.morningstar.com/articlenet/article.aspx?id=588201. That follows earlier analyses praising Price for getting ahead of the pack on a variety of allocation decisions (e.g., including real assets as inflation-hedging).
A second source is what you probably think of as "marketing literature" but I think of as "investor education materials." Price does a better job than the vast majority of their peers in treating investors as if they had brains; their T. Rowe Price Report series has long been short on glitz and long on evidence. Their 50-year analyses on the effects of asset allocations on risk/return patterns strike me as solid and not so complex as to be indiscernible.
And, finally, I do chat with the Price folks from time to time. Back when they launched Mid Cap Value, I got a hundred pages of simulations and tests. Subsequent to that, I've chatted with several of their fund managers and keep getting the same sense: that design and launch decisions are research-driven (and that it's investing research, not marketing research).
For what it's worth,
David (who's been working on this short note for 45 minutes - folks keep popping in)
Comments
Thanks.
Cheers.
DS
One evidence of asset allocation work comes from Morningstar's assessment of the glidepaths in the various firms' target-date funds. Morningstar rates Price as one of the best asset-allocators (along with, e.g,. PIMCO and GMO) and rate their target-date funds as "gold" across the board. See http://news.morningstar.com/articlenet/article.aspx?id=588201. That follows earlier analyses praising Price for getting ahead of the pack on a variety of allocation decisions (e.g., including real assets as inflation-hedging).
A second source is what you probably think of as "marketing literature" but I think of as "investor education materials." Price does a better job than the vast majority of their peers in treating investors as if they had brains; their T. Rowe Price Report series has long been short on glitz and long on evidence. Their 50-year analyses on the effects of asset allocations on risk/return patterns strike me as solid and not so complex as to be indiscernible.
And, finally, I do chat with the Price folks from time to time. Back when they launched Mid Cap Value, I got a hundred pages of simulations and tests. Subsequent to that, I've chatted with several of their fund managers and keep getting the same sense: that design and launch decisions are research-driven (and that it's investing research, not marketing research).
For what it's worth,
David (who's been working on this short note for 45 minutes - folks keep popping in)
DS