Fundsters, if you want a chance at getting onto Raymond James' Highly Recommended
list, then you should get to know Peter Greenberger
and his team.
Greenberger is director of mutual fund research and marketing at the broker dealer, and his team, among other things, selects which funds go onto the broker-dealer's Highly Recommended
The open architecture Raymond James
is an open architecture firm. Currently, there are 122 mutual funds on the list.
When searching for funds to include on the list, Greenberger and his team focus on a fund manager's investment team, and they examine the team's processes for three attributes in particular. They are:
"Our belief is that if we can find teams that execute on a repeatable basis, they will generate attractive risk adjusted returns over time," Greenberger recently told MFWire
. "The process is the focus, and if we can find a process we are comfortable with, then usually the team is able to generate attractive risk-adjusted results."
Greenberger is no slouch when it comes to drilling down into the nuances of PM team's thinking processes. He attended Penn State, garnering a B.S. in organizational psychology and then earning an M.A. in organizational development from Columbia University. He is also a Certified Financial Planner and has obtained the Chartered Financial Analyst designation.
He began his career as an analyst, first at Bank of America and then at AllianceBernstein. In 2005, he moved to Bernsteinís Global Wealth Management business unit as an associate. He joined Raymond James in 2007 as a Mutual Fund analyst, covering international and global equity funds. In 2012, he was promoted to his current position as Director of Mutual Fund Research and Marketing.
Garnering these insights requires a good amount of face time, according to Greenberger.
"In any given week, we have at least three face-to-face meetings with managers at the Raymond James home office. Mutual Fund Research analysts also travel to conferences and to the managersí offices, to have face-to-face meetings," he said. "There is a fair amount of manager interaction. The purpose of our research is to really understand the managersí philosophy and their process of allocating capital on behalf of clients."
The team puts a premium on straight-shooters, also.
"One of the things that we really gravitate towards is transparency, particularly those management teams that pride themselves on a high level of transparency. We are not looking for them to tell me or my team "Hey, we are buying security X or security Y" per se, but we are looking for a level of transparency that allows us to fully appreciate what they are going to do, and how they do it," Greenberger said.
What does inclusion the list mean for fund firms? Greenberger explained it in this way:
Approximately 31 percent of mutual fund assets at the firm are in some way related to the funds on the list.
Of course, after a certain point, fund sales and asset growth, like anything, take on their own momentum. We have seen many funds added to the Highly Recommended List experience pretty substantial uptake in assets. For example, a fund was added to the Highly Recommended List, having $80 million of Raymond James client assets at the time of addition. It subsequently grew to over $250 million in client assets in a span of only nine months. Of course, part of that was market appreciation.
We try to target funds that are very risk aware. That being said, the risk awareness may hamper a fundís ability to generate higher levels of return, which is a tradeoff I am willing to accept from time to time.
How does Greenberger view the list for Ray Jay's advisors?
"It reflects an opportunity set for our advisors. It is not going to cover every single asset class or strategy. But, for a broad cross-section of investors, the Highly Recommended List, in my opinion, reflects a toolkit that should meet the needs for developing a core portfolio," he said. "But it's useful not just for core portfolios. With the Highly Recommended List, there are a myriad of strategies, from U.S. equity focused funds to some very unique, differentiated strategies and everything in between."
The other facet of what they do, which Greenberger believes is unique, is "that we publish client-approved research on all of the funds on the Highly Recommended List. Each client-approved research report typically ranges between five and seven pages, and they are updated at least twice a year. They could be for an advisor who just wants to get familiar with a fund or a client who owns the fund. The reports provide a detailed overview of the investment team, its process, and the current drivers of performance. "
"What we are trying to do is provide as much transparency as possible with this and the opportunity set that is in front of them," he said.†
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