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The New York Times article seems to be talking about the extra gain, which I presume means gain in addition to beating the benchmark. Here's the quote: "Over t
by tinkerrr 12y ago
The New York Times article seems to be talking about the extra gain, which I presume means gain in addition to beating the benchmark. Here's the quote:
"Over the last 10 years, the return on those “public asset classes” has surpassed expectations by more than $2 billion, according to the comptroller’s analysis. But nearly all of that extra gain — about 97 percent — has been eaten up by management fees".
I read this as meaning that the extra gain meaning gain minus benchmark gain was $2B and most of it was eaten by fees (which is still bad, but not as bad as the article and its title seem to suggest).
- deleted 12y ago[deleted]
- vasilipupkin 12y agoI don't think that's correct. For example, the article says Until now, Mr. Stringer said, the pension funds have reported the performance of many of their investments before taking the fees paid to money managers into account. After factoring in those fees, his staff found that they had dragged the overall returns $2.5 billion below expectations over the last 10 years.
- tedunangst 12y agoThere appear to be two uses for the word "expectations" here, for two different things. There was the original expectation that the fund manager promised, that was exceeded. Then there's the expectation of what NYC would be able to withdraw, which failed to account for fees. Expectation A: Fund value will be X. Reality: Fund value is X + 2b. Expectation B: NYC can cash a check for X + 2b. Reality: NYC only gets X + 40m. The reporting isn't very clear, IMO.
- vasilipupkin 12y agoAgree. Reporter did a poor job. I would think the expectation should be the relevant benchmark, meaning, passive portfolio like Vanguard invested in similar proportions of stocks and bonds.