Published 02 May 2005
Reference 5258
Region North America
Length 20 page(s)

A+J+O uses quantitative stock picking engines based on statistical stock return anomalies. They use neither outside research nor soft dollars. They have a developed a relationship with brokers that fosters good execution quality of trades. Ted Aronson, the founder is wondering whether the firm should expand further the long-short investment strategy.

Teaching objectives

This case is about the most pressing strategic issues concerning the asset management industry: 1. The value added of stock picking. 2. The current disarray of actively managed, long-only funds. The proposal that these funds become long-short funds. 3. The way research used by the asset management industry is financed.

  • Long-short portfolio management
  • Stock return anomalies
  • Reporting of execution quality
  • Soft dollar
  • Active portfolio management
  • Predictability of returns
  • Stock picking
  • Future of investment industry. AR2005
  • AR0405
  • RD0505