Hedge Fund - Fisher Asset Management

Billionaire Ken Fisher is one of the most well-known money managers in the financial world. Ken Fisher followed in his father Phil’s footsteps as a renowned investor and author, as he penned a 32-and-a-half year column for Forbes magazine. He also has written 11 books, four of which became New York Times bestsellers and has published many papers. However, Mr. Fisher, who has a net worth of around $3.6 billion, is mainly known as the founder, chairman, and ex-CEO of Fisher Investments, a financial adviser with offices in the US, England, and Germany.

Fisher Investments was founded in 1979 and Ken Fisher had served as the company’s CEO until 2016, when he was succeeded by Damien Ornani. Mr. Fisher still has an active role at the company, as he is executive chairman and co-chief investment officer. Fisher Investments has more than $100 billion in Assets Under Management and is one of the largest wealth managers in the US. Mr. Fisher managed to grow his fund to such big proportions through aggressive advertising. Fisher Investments is one of the most advertised investment advisors and the company often sends letters, e-mails, and makes phone calls to clients, directly advertising its products. In addition to advertising, the growth of Fisher’s AUM figure was helped by the fact that it caters to wealthy people, with an investment minimum of $500,000. The fund charges a flat fee that varies between 1% and 1.5% depending on the size of the portfolio.

Ken Fisher’s performance was calculated by Forbes, based on his public stock picks revealed in his columns. The publication estimated in 2015, that over the previous 18 years, Mr. Fisher outperformed the broad US stock market by an average of 4.2 percentage points annually. Meb Faber, the co-founder and CIO of Cambria Investment Management, also looked through Fisher’s returns in an article posted on his blog. Between 1995 and 2014, Mr. Fisher’s picks lagged behind the MSCI World Index in 10 years, including four consecutive years between 2011 and 2014.

At Insider Monkey, we also calculated Fisher Investments’ performance by taking into account the fund’s positions disclosed in quarterly 13F filings with the Securities and Exchange Commission. We only took into account the fund’s long positions in companies worth over $1.0 billion. According to our estimates, Fisher Investments had 571 holdings in companies with market caps above $1.0 billion at the end of the second quarter of 2018. It generated a a weighted average return of 5.8% in Q3 and 7.6% during the first 9 months of 2018, which is higher than the S&P 500’s gain of 2.7%. For 2017, Fisher Asset Management’s estimated returns amounted to 24.3%, above the Index’s gain of 21.7%. In the same fashion, Ken Fisher's estimated return for 2016 was 15.6%, vs. SPY's 12% gain. Fisher’s 13F holdings returned 3.1% in 2015, which was significantly higher than the SPY’s gain of 1.2%. Overall, it looks like investors can outperform the S&P 500 Index by an average of 3 percentage points annually if they replicate Fisher's 13F holdings that are greater than $1 billion in market cap. If they directly invest in Fisher Investment's, they have to pay an annual fee of 1% to 1.5% which will capture nearly half of the outperformance generated by Ken Fisher.