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November 22, 2010 at 10:30 AM
Is there a way to profitably use active management with a portfolio of mutual funds, ETFs, stock baskets or other investment vehicles? The National Association of Active Investment Managers (NAAIM) says there is, and on Thursday issued its third $10,000 challenge to academics, financial professionals and analysts to test the viability and use of active management.
The NAAIM 2011 Wagner Award for Advances in Active Investment Managementis designed to build a better understanding of active investment management approaches and what it takes for these approaches to be successful, William Barack, chairman of the 2011 Wagner Awards committee, said in a statement.
The $10,000 prize will be awarded for the best original paper submitted to the competition. Second and third place papers will receive $3,000 and $1,000, respectively. The deadline for submissions is March 7, 2011. Awards will be announced at the NAAIM 2011 conference, May 2–4, 2011 in San Diego, California.
"NAAIM was founded in 1989 by investment managers who believe passive investing, i.e. your traditional buy-and-hold strategy, is an incredibly inappropriate way to invest," Barack said in the statement. "Passive investing leaves a portfolio completely vulnerable to bear markets. The last 10 years have more than demonstrated how destructive major market declines can be to the hopes and dreams of investors."
According to Barack, active management is risk management. It asks when it is too risky to be invested and when markets are in a definitive uptrend. "The 2011 Wagner Award is a challenge to financial academia and investment professionals to take a hard look at active management and test what works, what doesn't work and how active management might be used to reduce risk in a portfolio and increase opportunities for positive returns across all market environments."
