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This is interesting. I think markets are pretty efficient, so the main selling point IMO is exclusion. I used to wrk in portfolio construction and clients regul
by brntsllvn 5y ago
This is interesting. I think markets are pretty efficient, so the main selling point IMO is exclusion. I used to wrk in portfolio construction and clients regularly asked for exclusions like "sin" companies (e.g. alcohol), big oil, biotech (when stem cell research was controversial), etc. Clients also wanted a chunk of the portfolio dedicated to cash (say 10%) and to understand how the cash position affected overall returns. They also wanted to know what was the min number of holdings they could use to approximately replicate index returns (mainly to harvest losses and have a large bullpen of replacement equities). In any case, cool idea. I wonder how it stacks up against Wealthfront's exclusion selectors (which I've used for years). Anyway. Cool.
- whitej125 5y agoYeah it's been wild hearing what people wanted to exclude if they could. Even the definition of "sin" stocks varies person to person. Some people are anti-tobacco but perfectly fine with stem cell research. re: Wealthfront exclusion selectors - this is part of their direct indexing option at higher levels, yes?