Asset Managers with a PhD Outperform…

/Asset Managers with a PhD Outperform…

Asset Managers with a PhD Outperform…

By | 2017-08-18T17:09:58+00:00 November 7th, 2013|Research Insights|5 Comments

 What a Difference a Ph.D. Makes: More than Three Little Letters

  • Chaudhuri, Ivkovich, Pollet, and Trzcinka
  • A version of the paper can be found here.
  • Want a summary of academic papers with alpha? Check out our free Academic Alpha Database!
  • CXO has a nice summary here


Several hundred individuals who hold a Ph.D. in economics, finance, or others fields work for institutional money management companies. The gross performance of domestic equity investment products managed by individuals with a Ph.D. (Ph.D. products) is superior to the performance of non-Ph.D. products matched by objective, size, and past performance for one-year returns, Sharpe Ratios, alphas, information ratios, and the manipulation-proof measure MPPM. Fees for Ph.D. products are lower than those for non-Ph.D. products. Investment flows to Ph.D. products substantially exceed the flows to the matched non-Ph.D. products. Ph.D.s’ publications in leading economics and finance journals further enhance the performance gap.

Data Sources:

CRSP/Compustat, Informa, Mobius Group

Alpha Highlight:

Looks like an additional 42.7bps a year.

text SSRN-id2344938


  • I’m sceptical that 42.7bps a year in additional return is worth the hassle of having to deal with a PhD 🙂

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About the Author:

Wes Gray
After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes,, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.
  • julius

    Encouraging for a prospective PhD Student!