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Central Markets by Robert Lloyd, CFA

The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the  information cannot be guaranteed. All opinions and outlooks are subject to change.

  • Writer's pictureRobert Lloyd, CFA

Indexers Win Again

Great Article. WRONG Conclusion.

The rapid rise of AMC and Gamestop in the small cap universe does NOT invalidate index investing strategies. Rather, for those active managers that did NOT mirror the Reddit traders, they dramatically underperformed as the Small Cap benchmarks' positive performance were driven up by these two names. Expect lots of active managers to have bad news this year. Indexes win again.

One of the key reasons active managers are unable to beat their benchmarks is the large effect moonshots have on benchmark performance. When a small company goes up 1000%, it’s bound to impact the broad benchmark. If you are an active manager who didn’t own it, well, you just underperformed by a measurable amount.

Robert Lloyds, CFA®

Chief Investment Officer

Lloyds Intrepid Wealth Management

Lloyds Intrepid LLC is doing business as Lloyds Intrepid Wealth Management. Lloyds Intrepid LLC offers investment advisory services in the State of Texas where registered and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Lloyds Intrepid LLC and its advisers do not provide legal, tax or accounting advice. Lloyds Intrepid LLC formulates retirement plans, investment strategies, portfolio construction and investment due diligence for clients with signed investment advisory agreements with us. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. All opinions and outlooks are subject to change.

© 2021 Lloyds Intrepid LLC

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