12/06/2026
We met Professor Robert C. Merton this week at an investment conference in Hong Kong and would like to share some key takeaways from his session, which we believe may be of interest to a broader audience.
As a reminder, Professor Merton received the Alfred Nobel Memorial Prize in Economic Sciences in 1997 for a new method to determine the value of derivatives (the Black–Scholes–Merton model). He is the School of Management Distinguished Professor of Finance at MIT Sloan and University Professor Emeritus at Harvard University. He is also Resident Scientist at Dimensional Fund Advisors, where he has worked closely with the firm to bridge advanced financial science with practical investment solutions for long-term investors.
In his talk, Professor Merton reflected on the evolution of financial theory and markets over time. He highlighted the importance of an evidence-based, disciplined investing grounded in long-term academic research, rather than short-term forecasting or reacting to day-to-day market noise. His message reinforced the value of diversification, sensible portfolio construction, and a focus on return drivers supported by decades of research.
A central theme of the discussion was an investment philosophy that aligns with our own at Maseco: start with sensible, evidence-based concepts; supported by rigorous research; and executed with discipline and efficiency. In practice, this translates into:
• Using market prices as a source of information, rather than trying to outguess them;
• Building broad diversification across asset classes and geographies;
• Tilting portfolios toward long-term return drivers such as size, value, and profitability, instead of relying on short-term market forecasts;
• Managing risk over an investor’s full life cycle, taking into account changing personal circumstances, spending requirements, and tax considerations.
At MASECO, these principles underpin the global multi-asset portfolios we build for our clients. We adopt a multi-manager approach, selecting strategies from a range of firms, including those managed by Dimensional, where there is strong alignment with this framework. Our focus is on delivering disciplined, research-driven outcomes over the long term, with careful attention to risk management, cost efficiency, and helping clients avoid the behavioural biases that can undermine long-term outcomes.
It was a pleasure to attend the conference and to capture a moment with Professor Merton. His perspective remains both timeless and relevant. In today’s more volatile and often noisy market environment, his insights reinforce the importance of maintaining a disciplined, long-term focus in serving our clients.
