Fees on the firm's open-end and exchange-traded funds are a weakness, contributing negatively to the rating and creating a larger performance hurdle on funds. On average, Sierra Mutual Funds charges fees on its funds that are in the most expensive quintile of similarly distributed funds. With the current market environment of fee compression, this is cause for concern, as investors may flock over time to alternate asset managers to get a better deal. With an average asset-weighted tenure of nine years among the longest-tenured managers at Sierra Mutual Funds, the firm is on par with peers. Seasoned teams tend to have more experience to draw upon should they need to weather turbulent market conditions. Sierra Mutual Funds strategies have failed to have lengthy success. In particular, the firm's three-year success ratio demonstrates that only 35% have both survived and beaten their respective category median. A low success ratio indicates poor performance and raises questions about a firm’s discipline around investment strategy and product development.
Dave Nadig: The Future of Indexing, Governance, and Financial Technology
A leading financial futurist on whether open-end funds will become obsolete, the value of direct indexing, “ESG 2.0,” and more.