By |Published On: December 4th, 2013|Categories: Value Investing Research|

Dear Readers:
Joel Greenblatt has attracted a lot of followers based on the success of his book, “The Little Book that Beats the Market,” and the “Magic Formula” strategy it describes. The Magic Formula is a compelling concept and a promising strategy. Mr. Greenblatt even launched Formula Investing, which provides investors an easy way to invest in the Magic Formula strategy, via mutual funds and separately managed accounts (SMAs).

We believe, however, that changes are afoot over at Formula Investing. We’ve become aware, through various inquiries, that Formula Investing will no longer be offering their systematic value strategy in an SMA format. This is an unwelcome reality for many investors, because the performance for the “Magic Formula” has been nothing short of magic this year.

We understand that it may be necessary for Formula Investing to transition SMA accounts into their mutual fund platform. And we encourage you to pursue this option if it is the best fit for your situation. However, if you are an investor that prefers a separately managed account, we can facilitate.

Via our investment advisory firm we offer investment advisory services and a common sense approach to value investing via SMAs.

If you are currently a Formula Investing client that wants to maintain an SMA structure, we would be happy to speak with you as you conduct your year-end investment planning.

You can contact us here.
Semper Fidelis,
Wes

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About the Author: Wesley Gray, PhD

Wesley Gray, PhD
After serving as a Captain in the United States Marine Corps, Dr. Gray earned an MBA and a PhD in finance from the University of Chicago where he studied under Nobel Prize Winner Eugene Fama. Next, Wes took an academic job in his wife’s hometown of Philadelphia 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 firm dedicated to an impact mission of empowering investors through education. He is a contributor to multiple industry publications and regularly speaks to professional investor groups across the country. Wes has published multiple academic papers and four books, including Embedded (Naval Institute Press, 2009), Quantitative Value (Wiley, 2012), DIY Financial Advisor (Wiley, 2015), and Quantitative Momentum (Wiley, 2016). Dr. Gray currently resides in Palmas Del Mar Puerto Rico with his wife and three children. He recently finished the Leadville 100 ultramarathon race and promises to make better life decisions in the future.

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For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Third party information may become outdated or otherwise superseded without notice.  Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency has approved, determined the accuracy, or confirmed the adequacy of this article.

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. Our full disclosures are available here. Definitions of common statistics used in our analysis are available here (towards the bottom).

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