History tells us that mutual fund managers domiciled locally in India have been able to generate sustainably strong alpha over their respective benchmark. In this paper we consider the structural reasoning behind this and if it can be implied sustainably in the future.
Whilst our assessment of alpha generation is built on rolling three-year periods, we have also studied shorter term periods, where specific factors may have had an impact. By studying short-term factors and their impacts we can improve our understanding of the drivers of alpha in the future. Whilst we expect our local investment advisers to add substantial value through their stock picking skills over the long-term, our portfolio construction and overlay can add substantially through less volatile alpha achievement over time by understanding short-term impacts.
7 November 2018; Ray Dalio, Founder, Co-Chief Investment Officer & Co-Chairman, Bridgewater Associates on the Forum Stage during day two of Web Summit 2018 at the Altice Arena in Lisbon, Portugal. Photo by Harry Murphy/Web Summit via Sportsfile