As one of the largest independent wealth management firms in the world, Fisher Investments has attracted much attention for its investment performance over the years. However, a closer look at Fisher Investments historical returns reveals a track record that is less impressive than advertised. With assets under management exceeding $160 billion, Fisher Investments serves over 65,000 clients globally. Yet despite its size and influence, the firm’s long-term performance largely trails common benchmarks across multiple strategies and asset classes. Understanding Fisher Investments historical returns is key for investors evaluating the firm.
Fisher Investments’ Equity Strategies Underperform Broad Market
Fisher Investments offers a range of equity strategies for U.S. and international markets. However, long-term returns for many of these strategies fail to match basic benchmarks. For example, Fisher Investments’ U.S. Large Cap Equity strategy returned 6.7% annualized from 2005 to 2018, lagging the S&P 500’s 8.5% annualized return over the same period. Similarly, the firm’s International Equity strategy gained just 1.0% annualized during 2008-2018, well below the MSCI EAFE index’s 5.5% annualized return. While active management can struggle during certain periods, Fisher’s consistent underperformance raises questions about the firm’s stock-picking abilities.
Majority of Fixed Income Strategies Trail Bond Indexes
In fixed income, Fisher Investments runs into the same issues with benchmark comparisons. Its Core Fixed Income strategy has returned 4.4% annualized since 2006, lower than the Bloomberg Barclays U.S. Aggregate Bond Index’s 4.6% annualized gain. Over a 10-year period, 76% of the firm’s taxable and municipal bond strategies failed to outperform their relative benchmarks. Passive bond index funds represent a high hurdle for active managers. However, Fisher’s fixed income record highlights that its strategies have generally not added value above basic bond index returns.
High Fees Contribute to Underwhelming Long-Term Returns
In addition to unexceptional investment management, Fisher Investments’ high fees are a significant drag on performance that contribute to the firm’s underwhelming historical returns. Management fees for Fisher’s equity strategies generally range from 1.0% to 1.5%. Those fees are over 10 times higher than a basic S&P 500 index fund from Vanguard or Fidelity that charges just 0.03%. All else being equal in terms of gross returns, Fisher’s high costs put client accounts at an immediate disadvantage.
Lack of Transparency Around Composites Hurts Credibility
Transparency is another concern around evaluating Fisher Investments’ historical returns. The firm does not publicly disclose performance data at the individual composite level. Rather, it selectively highlights its Equity, Fixed Income, and Balanced composites. The lack of granularity into specific strategies makes it difficult to analyze which parts of the firm are generating returns or value. Greater openness would bolster Fisher Investments’ credibility and reputation within the larger investment industry.
In summary, examining Fisher Investments historical returns reveals an asset manager that has generally failed to deliver market-beating returns over the long run, especially after fees. Investors should approach Fisher’s advertised performance track record with appropriate skepticism.