Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • November 2016
11
People & Social News

Can monkeys outperform passive funds?

Open-access content Wednesday 26th October 2016 — updated 5.50pm, Wednesday 29th April 2020

On 19 September, The Actuarial Network at Cass (TANC) held an talk on the topical subject of ‘Smart Beta, Scrabble and Simian Index Strategies’, presented by Dr Nick Motson from the Faculty of Finance at Cass Business School.

2

On 19 September, The Actuarial Network at Cass (TANC) held an talk on the topical subject of 'Smart Beta, Scrabble and Simian Index Strategies', presented by Dr Nick Motson from the Faculty of Finance at Cass Business School. 

This event was sponsored by the IFoA and attended by 64 guests.

Motson explained that traditional equity indices such as the S&P 500 are constructed by selecting a subset of stocks and weighting each one by its market capitalisation. These indices have low turnover, thus require very little trading and are cheap to track. 

However, since late 2011 a number of alternative weighting schemes, termed 'smart beta', have been proposed. These claim to potentially offer superior performance by capturing market inefficiencies in a rules-based and transparent way, and have attracted significant investor interest, with over $500bn tracking smart beta indices by early 2015.

Motson presented the results of Cass's research where a common set of the largest 500 US stocks were used to examine the historical performance of eight popular smart beta approaches to better understand the possible sources of historical outperformance. 

His talk sparked further interest when he showed that Cass's own smart beta approach, based upon the rules of Scrabble and randomly created 'Simian' indices, all outperformed those based on market capitalisation in most cases. Therefore, to answer our headline question, it appears that, yes, monkeys can outperform passive funds!

The event concluded with a lively Q&A and further discussions during the networking session. TANC's next event: 'Activating pension plan participants: art or science?' will be held in November. 


For details, visit www.tanc-cass.co.uk or email [email protected] to join the TANC mailing list.

This article appeared in our November 2016 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

New Welsh and Zurich societies join IFoA network

New Welsh and Zurich societies join IFoA network
Wednesday 26th October 2016
Open-access content
2

Maths and paper aeroplanes take off in scotland

Maths and paper aeroplanes take off in scotland
Wednesday 26th October 2016
Open-access content

Proms and promenades

Proms and promenades
Wednesday 26th October 2016
Open-access content

Deaths: Mr Michael Evan Lewis & Mr Asoke Kumar Dutta

Deaths: Mr Michael Evan Lewis & Mr Asoke Kumar Dutta
Wednesday 26th October 2016
Open-access content
2

Systems thinking at Staple Inn

Nico Aspinall introduces ‘systems thinking’ and explains why it is important to increase its use in actuarial work
Wednesday 26th October 2016
Open-access content
2

Diversity paying dividends

Richard Purcell looks at how equality in companies can work to the benefit of all and ensure firms respond well to change
Tuesday 25th October 2016
Open-access content

Latest from November 2016

2

Plans to cut down on £1bn worth of whiplash car insurance claims

Motorists could see around £40 cut from car insurance premiums a year after the Ministry of Justice launched a consultation on proposals to reduce the high number of whiplash claims today.
Thursday 17th November 2016
Open-access content
2

Stress 'time-bomb' affecting productivity

One in four employees have taken time off work in the last year due to stress-related problems according to health and wellbeing provider BHFS.
Tuesday 15th November 2016
Open-access content

Triple-lock 'unfair and unsustainable'

The economy is heavily skewed towards baby boomers and against millennials, with the state pension triple-lock set to worsen the problem according to the Commons Work and Pensions Committee’s intergenerational fairness report.
Monday 7th November 2016
Open-access content

Latest from small_opening_image

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from inline_local_link

2

COVID-19 forum for actuaries launched

A forum for actuaries has been launched to help the profession come together and learn how best to respond to the deadly coronavirus sweeping the world.
Wednesday 25th March 2020
Open-access content
2

Travel insurers expect record payouts this year

UK travel insurers expect to pay a record £275m to customers this year as coronavirus grounds flights across the world, the Association of British Insurers (ABI) has revealed.
Wednesday 25th March 2020
Open-access content
2

Grim economic forecasts made as countries lockdown

A sharp recession is imminent in the vast majority of developed and emerging economies as the deadly coronavirus forces businesses to shut down across the world.
Tuesday 24th March 2020
Open-access content

Latest from 11

2

Plans to cut down on £1bn worth of whiplash car insurance claims

Motorists could see around £40 cut from car insurance premiums a year after the Ministry of Justice launched a consultation on proposals to reduce the high number of whiplash claims today.
Thursday 17th November 2016
Open-access content
2

Stress 'time-bomb' affecting productivity

One in four employees have taken time off work in the last year due to stress-related problems according to health and wellbeing provider BHFS.
Tuesday 15th November 2016
Open-access content

Triple-lock 'unfair and unsustainable'

The economy is heavily skewed towards baby boomers and against millennials, with the state pension triple-lock set to worsen the problem according to the Commons Work and Pensions Committee’s intergenerational fairness report.
Monday 7th November 2016
Open-access content

Latest from People & Social News

ui

People & Society news: March 23

Around the globe Reaching new heights in Nepal
Wednesday 1st March 2023
Open-access content
rseh

Pensions sub-committee seeks new recruit

Are you an experienced pensions actuary who is keen to be involved in responding to pensions industry consultations? Do you have technical expertise in UK defined benefit and/or defined contribution occupational pensions, and an interest in broader social and regulatory policy? If so, the Pensions Consultations Sub-committee of the Pensions Board is looking to appoint a new member.
Tuesday 28th February 2023
Open-access content
web_p47_Inside-Story_Mohamed Aly Soliman.png

Inside story: Mohamed Aly Soliman

Where are you based?
Wednesday 1st February 2023
Open-access content
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Manager - Building new team!

London (Central)
Up to £130k + Bonus
Reference
148845

Shape the Future of Credit Risk Model Development

Flexible / hybrid with 2 days p/w office-based
£ six figure salary with excellent bonus potential + package
Reference
148843

Longevity Director

Flexible / hybrid with 2 days p/w office-based
£ six figure salary with excellent bonus potential + package
Reference
148842
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ