Complicating matters even more, the previous park board in March voted unanimously to name former Superintendent of Planning Cameron Bettin as Bott’s successor. Bettin, who has been serving as assistant executive director since April 1, has a contract to take over the role on July 1.
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Posted by Interim Partners, Interim ICT director specialists.
All three departments now have interim directors.
- Orville Woodward, who has been with the facilities department for 39 years, makes $72,864 as interim director.
- Bridget Lindsey, who has been with information systems since 1999,Â makes $118,037 as interim director.
- Jim Albright, who has been deputy director of emergency services since 1989, makes $94,753 as interim director.
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Posted by Interim Partners, Interim legal advisor specialists.
Data from FE Analytics shows that genuinely active funds outperform the FTSE All Share and passive funds over the longer-term.
Genuinely active UK funds outperform their benchmarks over the longer-term, according to data from FE Analytics.
There is a widespread belief that the majority of active funds underperform their benchmarks, meaning that investors are better-off in low-cost index trackers.
However, our data shows that those portfolios which make meaningful bets against their index in the IMA UK All Companies sector have a strong tendency to outperform over the last decade.
We took all those IMA UK All Companies funds benchmarked to the FTSE All Share and examined their record over 10 years.
The r squared measure tells us how much of the fundâs performance is explained by the performance of the index.
Those with an r-squared score of less than 0.75 to the index were excluded as not having the appropriate benchmark.
We then took all those with a tracking error of at least 5 per cent over that time to exclude index trackers and those that make minimal bets against their index.
There were actually a couple of index funds with tracking errors even higher than this, which would be a concern to those looking for a passive fund.
The results show that the composite of the active funds significantly outperform over 10 years, returning 172.91 per cent against the 165.35 per cent of the FTSE All Share, dividends reinvested.
Performance figures are net of charges, meaning that the outperformance from the actual stock-picking would be higher. Performance of active funds versus index over 10yrsSource: FE Analytics
The average All Share index tracker has made just 146.3 per cent over that time, 19.65 percentage points lower than the benchmark.
The picture is more complicated over five years. The composite of all funds with a tracking error of at least 5 per cent has slightly underperformed the All Share over that time.
The FTSE All Share has made 36.5 per cent over that time as the average fund with a 5 per cent or higher tracking error over that time has made 34.5 per cent. Performance of active funds versus index over 5yrsSource: FE Analytics
However, a majority of such funds have added value, with 24 recording a positive information ratio against 21 that have a negative information ratio â 53.3 per cent.
The information ratio gives us the value added per extra unit of risk that the manager has taken on versus the index.
And the active funds have outperformed the index trackers, which made only 31.9 per cent over that time. Performance of index and trackers over 5yrsSource: FE Analytics
Interestingly the period of highest outperformance came in the bull market from March 2003 to July 2007, when the average actively-managed fund made 116.52 per cent against the FTSE All Shareâs 104.67 per cent. Performance of active funds versus index 2003-2007Source: FE Analytics
There is no clear pattern of active funds doing better in up markets, however, with the average active fund marginally underperforming in the bull market since 2009.
Our figures highlight the dangers of looking at sector averages without digging into the details.
There are a number of reasons why managers would be tempted to stick relatively close to the benchmark.
By making fewer bets against the benchmark there is less likelihood of large underperformance, which could ultimately lead to a manager losing his job.
Rob Gleeson, head of research at FE, says that he isnât surprised at the outperformance of genuinely active funds.
He points out that few people focus on the arbitrary nature of the stock market indices.
Most major indices are market-cap weighted, meaning that they are constructed by weighting each stock by the value of shares in issue. Indices are then rebalanced regularly, typically once or twice a year.
Research from Cass Business School found that a market-cap weighted index was one of the worst ways to construct an index in terms of the returns provided.
In fact, they found that a randomly selected group of stocks beat the major indices over long time periods.
They programmed a computer to randomly pick and weight the 1,000 stocks they were studying 10 million times over each of the 43 years of the study, and almost every portfolio outperformed the market-cap weighted index.
The researchers also showed that a traditional market-cap weighted index of US stocks would have performed worse over the past 40 years than one based on each of 13 other metrics including sales, dividends and annual cash flow. In a series of articles in coming weeks FE Trustnet will be looking in more detail at how actively-managed funds fare in different IMA sectors.
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The manager has a significant weighting to high beta equities and cash because he thinks valuations in defensive equities and bonds are so poor.
Large cap defensive equities are âincredibly overvaluedâ, according to Cazenoveâs Robin McDonald, who says he is avoiding popular UK Equity Income funds in the ilk of Invesco Perpetual High Income and Artemis Income.
McDonald (pictured), who runs several fund of funds portfolios at Cazenove - including the £1.1bn Multi Manager Diversity fund - prefers cheaper cyclical options in the current environment, which he is offsetting with a high weighting to cash.
The manager has been wary of defensives for more than a year, but given the recent rally in sectors such as pharmaceuticals and tobacco, he says valuations are now dangerously stretched.
âUp until the beginning of 2012, weâd had a conventionally defensive portfolio, which worked out well,â he said.
âOur observation then was that cyclical stocks were on a discount comparable to March 2009. We saw an opportunity to switch.â
âIn the first quarter of 2012 our US exposure worked well, then Europe led the way in the second half, and most recently Japan has done very well.â
âCyclicals re-rated, but everything did fine. Someone like Sanjeev Shah [who runs Fidelity Special Situations] beat Neil Woodford [who runs Invesco Perpetual High Income] by 20 per cent, but Woodford only just underperformed the market.â Performance of funds and index in 2012Source: FE Analytics
âOn aggregate the whole market got more expensive in 2012, but in our view defensives are now getting incredibly expensive, especially seeing that theyâve recently led the rally. Cyclicals are still good value in some places.â
McDonald has recently sold out of the JOHCM UK Opportunities fund, which he says was his last remaining defensive portfolio. He replaced it with the more economically sensitive Majedie UK Equity fund.
âWe have things like Fidelity Special Sits, Cazenove European Income which is pro-cyclicals at the moment, and GLG Japan Alpha Core. Investec Global Special Sits is probably our most defensive fund, but the manager [Alastair Mundy] does have some big bets.â
âWeâve also got things like JPM Global Consumer Trends and Findlay Park American, which arenât exactly defensive.â
McDonald is extremely negative on bonds, which he has minimal exposure to. He points out that defensive equity funds display many of the same characteristics as government bonds, which he says illustrates why heâs currently steering clear of them.
âIf you look at the 10 year government bond market and relative performance of Neil Woodford, you see something very interesting. When yields fall, Woodford does fantastic,â he explained.
âI think you need to see a US-type recession, but short of that bonds and funds like Woodfordâs look incredibly expensive.â
McDonald and co-manager Marcus Brookes split their funds into three buckets: equities, cash & bonds, and alternatives. In general, assets are split equally between them.
They currently have 28 per cent in equities, 28 per cent in alternatives, but the vast majority of their third bucket is in cash, rather than bonds.
âCash currently has a very large weighting in our fund, at 30 per cent,â he said. âSix weeks we had six bond holdings accounting for 23 per cent, but that is now down to 13 per cent and three holdings.â
âWeâre comfortable with the cash-cyclical barbell. We donât want to be fully invested in higher risk shares, but we donât like bonds.â
One of the duoâs bond holdings is the F&C Macro Global Bond fund, which McDonald points out is itself an âanti-bondâ play.
âThis fund has taken the view for the last 18 months that the sovereign bond market is massively overvalued, and has been outright shorting it. Soon this will be the only bond fund worth holding,â he said. Performance of fund versus sector over 18monthsSource: FE Analytics
While some may look at McDonaldâs high cyclical and cash exposure as being risky, he sees things in a very different light.
âA lot of people claim to be bearish at the moment, but in spite of all the talk these same people are fully invested. We hold cyclicals and donât have defensives, which some say might be risky, but we do have 30 per cent in cash,â he explained.
âPeople keep asking me, is it brave to hold cash? In my opinion, itâs much braver to be fully invested in extremely expensive defensives equities, and expensive credit which is also massively illiquid.â
âThe corporate bond sector is red hot. There could be the mother of all runs to the exit at some point when people realise that. We got out early, and was happy to come out with profits.â
Though the managers are âfairly positiveâ, they acknowledges that valuations arenât as attractive as they have been in the past three years or so.
âThere are some places that are undervalued on a relative basis, but that doesnât mean things are cheap on an absolute basis,â he said. âWeâre in to a four year bull market.â
âWe would look to add to our risk exposure if there was a fall in the market, though it would depend on how much it falls and why. I donât feel massively bearish at the moment. I donât think weâre on the cusp of a big global recession as weâre already in one in certain places, like Europe.â
âIt will probably take something in the US to really hurt us, but while thatâs not impossible, itâs certainly improbable.â
âWe would hope to be closer to being fully invested in 2014.â
McDonald and Brookes have been very active in changing the focus of their portfolio in recent years from cyclical, to defensive, and back to cyclical. This has resulted in the fund achieving top-quartile returns of 34.37 per cent over five years. Performance of fund versus sector over 5yrsSource: FE Analytics
Cazenove Multi Manager Diversity has a minimum investment of £1,000 and an ongoing charges figure (OCF) of 1.8 per cent.
All of FE Trustnet's articles will be focused on Cazenove today. In the next article, we speak to Matthew Hudson about his five-crown rated Cazenove UK Equity Income fund.
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Ellig has worked in University Communications since 2006, first as a writer covering the MSU College of Engineering and then as director of the MSU News Service since 2008. The MSU News Service is the primary liaison between the university and the media. In August, Ellig was appointed interim director of external relations to serve as the university's primary liaison on state legislative matters.
Posted by Interim Partners, Interim legal counsel specialists.