David Wong, Managing Director and head of the Portfolio Solutions Group at Toronto- and Montreal-based CIBC Asset Management, appears Aug. 2, 2022, as a guest with Sherman Show hosts Jeffrey Sherman and Samuel Lau. Among other topics, Mr. Wong discusses the differences between the far more fragmented banking system in the U.S. versus in Canada where the “Big Five,” including Canadian Imperial Bank of Commerce (2:30), have 80% market share; $200 billion CIBC Asset Management’s history and business (3:41); his role heading the firm’s manager research team (5:35), which analyzes investment managers across the globe and the firm’s own internal investment strategies “to find the best solutions for clients that best fulfill their objectives.”
While cautioning against “over-optimized” statistical approaches that work only in a back-tested manner for evaluating investments and investment managers, Mr. Wong describes (8:26) the portfolio solutions team’s analytical process, starting with long-term forecast modeling to help determine strategic asset class allocations. “From that, there’s a bit of an optimization, a bit of an art, a knowledge and awareness of the global markets in terms of the market-cap weightings out there, what’s the opportunity set. And then we’ll supplement that with kind of that subjective assessment of where the puck might go.”
Messrs. Wong, Sherman and Lau (19:25) devote much of their discussion to the art and science of selecting individual investment managers – an endeavor Mr. Wong says that is “more effortful than people want to believe.” He emphasizes the importance of going beyond the checkbox of manager credentials to assess their humility “and that open mindedness to know when they’re wrong.” He says gaining that insight into candidate managers that can only come through direct interviews with them. “Probably the biggest thing people get wrong” in the search for good forecasters (22:58), David Wong says, “is looking at past performance and all its variants” through simplistic attribute substitution and rear-focused metrics such as active share and R^2.
As DoubleLine’s Deputy Chief Investment Officer, Jeffrey Sherman oversees and administers DoubleLine’s Investment Management sub-committee coordinating and implementing policies and processes across the investment teams. He also serves as lead portfolio manager for multi-sector and derivative-based strategies. Mr. Sherman is a member of DoubleLine’s Executive Management and Fixed Income Asset Allocation Committees. He can be heard regularly on his podcast “The Sherman Show” (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) where he interviews distinguished guests, giving listeners insight into DoubleLine’s current views. In 2018, Money Management Executive named Jeffrey Sherman as one of “10 Fund Managers to Watch” in its yearly special report. Prior to joining DoubleLine in 2009, Mr. Sherman was a Senior Vice President at TCW where he worked as a portfolio manager and quantitative analyst focused on fixed income and real-asset portfolios. He was a statistics and mathematics instructor at both the University of the Pacific and Florida State University. Mr. Sherman taught Quantitative Methods for Level I candidates in the CFA LA/USC Review Program for many years. He holds a B.S. in Applied Mathematics from the University of the Pacific and an M.S. in Financial Engineering from the Claremont Graduate University. Mr. Sherman is a CFA® charterholder.
Mr. Lau joined DoubleLine in 2009. He is a Strategist on the Fixed Income Asset Allocation (FIAA) Committee and a contributing member on the Global Asset Allocation and Macro Committees. Mr. Lau is a Portfolio Manager on DoubleLine’s strategic commodity strategy while working in portfolio management and trading for derivatives-based and multi-asset strategies, including DoubleLine's Shiller Enhanced CAPE®, Shiller Enhanced International CAPE®, Real Estate and Income, and Multi-Asset Trend strategies. He also co-hosts the Sherman Show (Twitter @ShermanShowPod, ShermanShow@Doubleline.com) and Monday Morning Minutes (Twitter @DLineMinutes, Minutes@Doubleline.com) podcasts. Prior to DoubleLine, Mr. Lau was a Vice President at TCW where he worked under Jeffrey Gundlach as a Research Analyst in the Mortgage Group. He holds a B.S. from the University of Wisconsin, Madison and an MBA from the Marshall School of Business at the University of Southern California.
