Morgan Stanley’s Vishal Gupta and Carmignac’s Mark Denham named City’s top stock pickers in new research
Morgan Stanley veteran Vishal Gupta is the City’s best portfolio manager when it comes to picking stocks, according to research released today.
The Square Mile boss who works for Morgan Stanley Investment Management was recognised as the top brass in a study released by Essentia Analytics.
Mark Denham of Carmignac came in second, while Jonathan Good at Baird took the third spot in Emerging Market Leaders latest ranking.
The research uses skill measures, such as stock picking, as well as entering and exiting out of positions at the right time, rather than past performances to judge investment managers.
Behind Denham and Gupta were Xavier Hovasse and Haiyan Li-Labbé of Carmignac and Martin Walker of Invesco.
Calling the new methodology for judging portfolios a “sea-change in the industry”, Clare Flynn Levy, founder and CEO of Essentia Analytics, said it offered “the ability to prove the extent to which an active fund manager is skilled has been a sort of holy grail for investors”.
Fund managers “can finally demonstrate their value over passive index funds, and managers who have not yet achieved a high skill level have clarity on what they can do to continuously improve.”
The research is based on a new method called the Behavioural Alpha Benchmark, which looks beyond traditional approaches for evaluating the performance of fund managers.
Essentia used the method to conduct tests on 76 managers over 36 months, with results showing most got decisions wrong a majority of the time.
Just 18 per cent had a ‘hit rate’, decisions which added value, above 50 per cent. The data shows however, that when decisions were correct, 68 per cent added more value than what they lost when they got it wrong.