Infundly Weekly Briefing - 21 August 2026
This week’s Research Reads centres on a recurring challenge for fund selectors: distinguishing apparent investment quality from evidence that survives closer scrutiny. The selected papers and reports examine liquidity governance, active fund selection, performance measurement, systematic factor implementation, macro conditions and the evolving Japanese equity opportunity set. Together, they reinforce the need to test whether reported outcomes, stated investment edges and portfolio characteristics remain credible once differences in methodology, vehicle structure, implementation and market regime are taken into account.
What changed: On 13 August, the FCA finalised new liquidity-risk rules for UK UCITS and NURS. The changes strengthen expectations around anti-dilution tools, assessment of asset liquidity and stress testing, while explicitly retaining ultimate responsibility for liquidity management with the authorised fund manager. The main rules take effect from 1 February 2027.
Worth reading because: This should feed directly into fund DDQs. Selectors should test how managers determine asset liquidity, calibrate swing pricing or other anti-dilution tools, model stressed redemptions and oversee delegated portfolio managers. Importantly, outsourcing investment management does not outsource the AFM’s accountability.
What changed: This new paper combines 30 fund-selection indicators into an operational model and tests it out-of-sample between 2010 and 2025. The authors report net-of-fee outperformance of both the average active fund and an investable passive benchmark, with results comparable to more complex machine-learning approaches.
Worth reading because: It is unusually relevant to practical manager research. Rather than asking whether one metric, past alpha, active share, fees or manager tenure—predicts success, it supports assessing multiple weak signals together. The more interesting question for selectors is which characteristics add genuinely independent evidence rather than repeatedly measuring the same underlying trait.
What changed: The authors examine apparently superior performance from institutional separate accounts relative to mutual funds. Using vehicles with the same managers, strategies and near-identical portfolios, they find that a previously observed 50–80bp annual advantage can be explained by reporting conventions and investment size rather than superior institutional manager selection.
Worth reading because: This is an important warning for comparative performance work. Differences in NAV methodology, fee treatment, vehicle structure, reporting standards or account size can create apparent performance gaps without demonstrating investment skill. Selectors should establish measurement comparability before drawing conclusions from peer or vehicle comparisons.
What changed: Published on 19 August, AQR revisits style premia—or “academic alpha”, as a source of liquid, systematic diversification. The emphasis is less on discovering new headline factors and more on how signal design, portfolio construction and multi-asset implementation determine whether academically documented premia survive in a real portfolio.
Worth reading because: It provides a useful framework for due diligence on systematic and alternative-premia managers. Evidence that a factor exists is only the starting point. Selectors need to understand signal definitions, diversification between signals, turnover, capacity, leverage, financing and how much theoretical premium is lost between research and implementation.
What changed: MRB’s 17 August work argues that the significant rise in policy rates and government-bond yields has still not tightened financial conditions sufficiently to end the risk-asset cycle. It sees a risk that cautious monetary policy ultimately allows long-term Treasury yields to overshoot, potentially turning an orderly rise in yields into a more material equity headwind.
Worth reading because: It offers a useful challenge to portfolios built around the assumption that higher yields automatically signal restrictive conditions or an imminent downturn. For multi-asset and equity managers, the due-diligence question is how portfolios behave if growth remains resilient while discount rates continue rising, a materially different risk from a conventional recessionary bond rally.
What changed: Neuberger argues that Japan’s investment case is evolving from balance-sheet repair and capital-efficiency improvements towards actual earnings growth. It highlights widening differences in corporate governance and argues that AI exposure extends beyond the obvious semiconductor beneficiaries into areas such as electrical infrastructure and battery technology.
Worth reading because: This provides useful context for Japanese manager research. If the market’s opportunity set is broadening beyond the initial governance-reform winners, selectors should test whether managers have adapted their research priorities, or remain positioned primarily for the previous phase of Japan’s re-rating.
Infundly takeaway
The active fund-selection research is a useful reminder that manager quality is unlikely to be captured by any single statistic. More robust assessment combines multiple signals and tests whether each adds genuinely independent evidence. The work on institutional versus mutual-fund performance reinforces this point from another angle: apparent differences in manager skill can instead reflect reporting conventions, fee treatment, account size or vehicle structure. AQR’s factor research makes a similar distinction between theory and investable reality, where signal construction, turnover, financing and implementation determine how much of an academic premium survives in practice.
The FCA’s liquidity reforms add a governance dimension, showing that outcomes are shaped not only by what a fund owns but by how liquidity is assessed, stress-tested and managed. The broader macro and Japanese equity research also underline the need to test whether a manager’s current positioning still fits the environment ahead. For selectors, the implication is to separate the investment proposition from the evidence that supports it: ensure comparisons are genuinely like-for-like, identify the real sources of return, understand implementation constraints and assess whether the portfolio remains appropriate for the regime it now faces.
For selectors, due diligence should increasingly distinguish between the proposition in theory and the outcome after fees, frictions, vehicle structure, liquidity constraints and governance are applied. That gap is often where the most useful evidence about investment quality sits.
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