Key facts
- Kate El-Hillow is the chief investment officer at Russell Investments.
- Institutional investors evaluate funds during market downturns.
- It is important to distinguish between bad investments and bad decisions.
- Understanding fund managers' risk-taking is crucial.
- Communication transparency from fund managers is important.
- This approach helps investors make informed decisions about allocations.
- Investors assess whether underperformance is due to market conditions or manager issues.
Kate El-Hillow, chief investment officer at Russell Investments, offers guidance for institutional investors evaluating funds amidst market downturns. She emphasizes a critical distinction between investments that are inherently bad and decisions that prove to be poor. This nuanced perspective is crucial for asset allocators who must determine the root cause of significant losses. El-Hillow's advice centers on understanding the fund managers' approach to risk-taking, including their willingness to take on leverage or concentrate positions. Furthermore, she underscores the importance of transparent communication from fund managers, particularly during periods of market volatility. Investors should look for managers who clearly articulate their strategies, explain the rationale behind their decisions, and provide timely updates on performance and market outlook. This clarity helps investors assess whether the fund's underperformance is a temporary setback due to market conditions or a sign of deeper issues with the manager's strategy or execution. By focusing on these factors, institutional investors can make more informed decisions about their portfolios, deciding whether to maintain, increase, or reduce their exposure to specific funds.