Most institutional investors evaluate active equity managers using Brinson-Fachler attribution or Fama-French factor models -- frameworks that explain performance after the fact but say little about the decisions that produced it.
Behavioral biases and cognitive depletion conspire to make exit decisions among the weakest areas of professional investor skill. The data -- and the habits of the world's best fund managers -- show there's a better way.
Our latest (three years ended December 31, 2025) Essentia Behavioral Alpha Benchmark ranking shows a pronounced downturn in decision-making outcomes across the ranked universe.
This quarter’s results show a shift in the drivers of decision-making skill — from stock selection toward capital-allocation and timing decisions.
The question of whether quarterly earnings reporting promotes or undermines long-term value creation is back on the table. With U.S. policymakers once again considering a shift to semi-annual reporting, it’s worth asking: what would such a change really mean?
Reversing a downward trend, active equity manager decision-making added value in the three years ending 30 June 2025.
Knowing what to ask – and how to ask it – matter more than ever.
As decision-making scores extend a multi-quarter decline, skilled managers continue to stand out for their consistent performance.
Our 36-month decision-skills analysis finds strength in small caps, declining hit rates, and a new leader in our ranking.
For active managers, the path ahead is narrower and more demanding, but those who can align with evolving investor needs and deliver tangible value will find that their relevance is not obsolete.
