Equity Trade Cost Savings Calculator
The costs incurred by managers to trade their client's stocks can vary dramatically. For a variety of reasons, some managers implement their investment decisions more efficiently than their peers.
The average difference between managers ranking in the bottom quartile of execution costs and the median manager within the same peer group can exceed 85 basis points!
Meaningful oversight enables Plan Sponsors/Pension Funds and other asset owners to ask
the right questions - thereby becoming the "squeaky wheel." This helps focus attention
on outlier managers/issues. As bottom-quartile managers pay more attention to
these matters, their trading costs tend to move closer to peer averages.
To receive a free estimate of the potential savings associated with helping a bottom-quartile
manager focus more on their trading costs, and begin improving their peer
group ranking, simply click on the investment mandate drop-down box to the right
and insert the mandate of a particular manager. Then insert the assets under management (AUM)
for that manager, where indicated. We will apply one-fourth of the inserted
AUM amount (as a proxy for the portion of trade activity that might be bottom-quartile),
to the difference of the cost incurred by bottom-quartile vs. median managers in
that peer group. This represents the annual amount
"at risk" - which might be saved through meaningful trade cost analysis.
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