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At Fastnet AMS, we provide expert insights, industry perspectives and practical tools that industry professionals need to sharpen their strategy and elevate their performance.

What you’ll find:

  • Expert insights: learn from seasoned professionals and uncover data-driven approaches to investment decision-making.

  • Training and development: participate in expert-led training programs to optimise your team’s decision-making and uncover unconscious biases.

  • Case studies: explore real-world case studies of how top financial leaders transformed their portfolios using SkillMetrics® and CoreValueMetrics® solutions.

Transforming the performance of the fund management industry

Ali Chabaane Ali Chabaane

Pulling the trigger: how to time an exit

Choosing the right investments for a portfolio is obviously crucial – but knowing when to exit a position is just as important.

We analysed thousands of ‘sell’ decisions and found delays in pulling the trigger were seriously damaging fund manager performance.

In this article, we explore the importance of exit strategies, the approaches of different investor types, and how sell decisions are influenced by behavioural bias.

The key findings include: 

1.   Sell to cut losses: Although exiting can lock in gains, most sell decisions are made to contain losses—highlighting their primary function as risk control.

2.    Delayed departure: Many fund managers wait too long between recognising a position is no longer working and selling. This can lead to escalating losses.

 3.   Mistimed profits: Even when exiting winners, managers sometimes give back more than 50% of peak gains before selling. This suggests consistent challenges in exit timing. 

4.   Biases shape behaviours: Overconfidence, the disposition effect, and anchoring are among the biases that can affect returns. 

 5.   De-risking influence: Positions preceded by a scale-down call are exited three times faster, suggesting staged exits can prepare managers to act more decisively. 

6.   Structure improves outcomes: Managers with clear exit strategies are better equipped to act consistently and optimise outcomes.

 



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Ali Chabaane Ali Chabaane

How AI is transforming investment strategies

We share our findings from deploying AI in fund management and explain how it can be used in the pursuit of better returns, improved margins, and higher Assets Under Management

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