Answer from David Harding

A good question that was posed to David Harding of Winton Capital and his answer:

Q: Are you convinced that your investors really do understand the risks that you’re taking with their funds?

David Harding: Investors, as I said before, are all different. Some have a greater appreciation and some a lesser appreciation. I think all of the investors are aware in theory of the risks that we are taking. But I think that when it comes to actual losses, loss-making periods, losing months, often that theoretical understanding dissolves into a not instinctive understanding. Every investor that has been through our offices, or has seen one of our sales representatives, will have been shown a chart that shows that we have a semi-variance of daily returns of 1.35 per cent. That translates to about 22-23 per cent a year; the same level of risk, roughly, as the UK stock market or the US stock market. Nobody expects the UK or US stock market to go up day after day after day, or month after month after month. Everybody expects there will be bull markets. There will be periods, sometimes long periods, where the market goes sideways.