The Wilshire Manager Research Process

Wilshire has been conducting in-depth due diligence on managers and markets for more than 30 years, setting us apart from the competition and offering our clients Insight and Access traditionally only available to institutional investors.

Global Manager Research

Across the firm, Wilshire Associates has more than 60 investment professionals contributing to its manager research capabilities.

Looking Beyond Historical Returns

Skilled investors know that a manager’s past performance does not predict their future results. To truly understand a manager’s skill requires the ability to strip out returns attributable to the market, style effects, and other factors embedded in their portfolio that are not intended to be specific drivers of alpha based on their philosophy and process. For example, a major driver of a bottom-up stock pickers’ alpha should be stock selection, while a top-down macro manager should add value across sectors, countries, etc. Wilshire’s manager research process is designed to identify managers who have a consistent, repeatable, and sustainable ability to produce alpha on a forward-looking basis.

Quantitative Breadth & Qualitative Depth Tools

Wilshire’s process begins with a large database of over 8,000 investment products that are screened based on quantitative factors to arrive at a short list of managers. Wilshire’s manager research team conducts in-person, telephone, and onsite meetings with investment managers on this list. In 2015, the team conducted approximately 1,200 meetings covering 1,600 strategies.

Wilshire Management Research Process

Qualitative Review


Organization & Team

Organizational structure and stability can be crucial to the success of an investment strategy. We evaluate the ownership and operational structure of each organization to assess whether the interests of the manager, the firm, and the clients are aligned. As part of the evaluation we consider compensation structure, team/firm stability, trading resources, client service, and other relevant factors.

Portfolio Construction

Is the manager’s current outlook reflected in the portfolio’s relative positioning? For example, if the manager has a bearish outlook, is the portfolio over-weighted in the more defensive sectors and more heavily invested in stable, larger capitalization companies? If there are constraints on the out-of-benchmark holdings, is that reflected in the actual holdings of the portfolio?

Investment Process

Are the sources of performance consistent with the manager’s investment thesis? For example, if the manager employs a bottom-up process, then is their stock selection driving performance? If the manager employs top-down macro themes, then is their sector or country selection driving performance?

Risk Management

Do the measurable risks in the portfolio reflect the manager’s philosophy and the firm’s technological resources? For example, if the manager boasts of highly efficient, proprietary risk-monitoring software, is that evident? If the manager states that their goal is downside protection in bear markets, or upside capture in bull markets, does their performance match this objective?

Monitoring

Wilshire employs an active and rigorous monitoring process that analyzes performance, return attribution, qualitative factors, and other considerations. This approach seeks to capture any changes to a manager’s style, investment process, risk profile or expected alpha so appropriate action can be taken if needed.

Alpha: The risk-adjusted excess return for the portfolio
Efficient Frontier: A set of portfolios that offers the highest expected return for a defined level of risk