Stock market investing strategy of fund managers who beat 97% of peers - Business Insider

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A pair of fund managers beat 97% of their peers this year without picking a single stock. They gave us a peek into their unique strategy, and explained how they profit even during sell-offs.

has returned 36% this year, outperforming 97% of its peer group according to Bloomberg data.

While Dravid and Rankin take a different view from their peers on stock picking, they are in alignment on the importance of outperforming the market. In fact, their fund's survival depends on it because they waive management fees for a year if they fail to beat theor sectors with the greatest upside potential, they adopt a differentiated approach. It can broken down into three main components.is a strategy that trades S&P 500 equity index futures.

All told, they offer broad exposure to stocks through S&P 500 futures, hedge with trading programs that are negatively correlated, and throw in safe-haven assets for diversification. "Trying to tactically time the market and look at what's going to happen in the next six months or a year — or even two or three years — is extremely difficult, and we don't think we are good are doing that," Dravid said.

 

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