Fisher Investments is a large money management firm founded by billionaire Ken Fisher. As an active investment manager, Fisher Investments aims to beat market returns through stock picking and asset allocation. When evaluating Fisher Investments, a key question for investors is: what are the historical returns of Fisher funds compared to benchmarks? This article will analyze Fisher’s reported returns and track record to assess their performance.
To understand Fisher’s returns, we first need to know their investment strategy. Fisher Investments manages over $140 billion for individual investors, pension funds and institutions. They follow an active approach based on macroeconomic trends and fundamental stock research. Their goal is to rotate into areas of the market poised to outperform, while avoiding risks.
Fisher’s core strategy is tactical asset allocation, periodically shifting allocations between stocks, bonds and cash. Within equities, they overweight market sectors viewed favorably and underweight out-of-favor sectors. Individual stock selection aims to choose winners within favored sectors. Fisher’s approach leads to high portfolio turnover and trading costs as they actively move in and out of positions.
Next, we’ll examine Fisher’s published returns versus benchmarks over key time periods. How have they performed in both up and down markets?
Fisher’s Long-Term Returns
Fisher Investments claims that their Private Client Group strategy, representing the bulk of assets, has returned 11.5% annually since inception in 1979. This exceeds the S&P 500’s 10.5% return over the same period. However, it is difficult to verify these returns as Fisher is a private company who controls its own reporting. Their track record is not reported transparently or audited by a third party.
While clients receive personalized account statements, Fisher does not disclose full composite performance for all client assets. Some independent estimates have calculated Fisher’s returns in the 10-11% range over the long run. This suggests they have roughly matched the market over time, despite higher fees and trading costs than passive index funds.
Ultimately, Fisher’s long-term returns appear competitive but not extraordinarily high for their level of risk. Their active strategy has not substantially beaten a simple S&P 500 index fund approach. Investors pay a premium for Fisher’s asset allocation but do not seem compensated with market-beating returns.
Bear Market Performance
Fisher’s performance also appears mixed in down markets. During the dot com crash, Fisher claims to have preserved capital far better than the S&P 500’s 49% peak decline from 2000-2002. But in the 2008 financial crisis, one analysis showed Fisher’s flagship portfolio fell 42% versus S&P’s 37% drop.
This raises questions around Fisher’s tactical allocation and downside risk management. While they seek to reduce losses in bear markets, their results are uneven. This is the double-edged sword of active management – outperformance potential comes with risk of larger losses.
Overall, Fisher’s bear market returns do not demonstrate clear protection on the downside. Their flexible strategy has not consistently reduced losses compared to a passive index approach across market cycles.
Excess Returns and Added Value
To summarize, Fisher Investments has produced modest excess returns over the long run compared to a basic S&P 500 index fund strategy. But these returns have come at the cost of higher fees, trading expenses and tax bills for clients.
Fisher’s tactical allocation has not provided a clear advantage in down markets with lower volatility and drawdowns. Their active stock picking has also failed to substantially beat the market over multiple decades.
For investors choosing Fisher, they are betting on future excess returns, not demonstrable past results. While Fisher deploys sophisticated strategies, their real-world added value remains debatable based on historical returns. For many investors, a low-cost passive approach may provide similar returns without active costs and tax impacts.
Fisher Investments’ published historical returns suggest they have roughly matched, but not meaningfully exceeded, standard equity benchmarks over long time horizons. Their active tactical strategy has not consistently delivered outperformance or downside protection. While past performance does not guarantee future results, Fisher’s track record provides limited evidence for their ability to beat index returns after fees.