I think you have hit the nail on the head. This is my personal view (right or wrong) - The next 5 year generating a meaingful return is actually going to require conviction. Not just "a bit" of conviction, real conviction. For example, Hyperion have a very specific view of the world, they will either be very right or very wrong, no in between.
Magellan also fit into this camp, but this is less of a stock/style specific view and more of a macro and political view, which historically has been very hard to predict.
For me personally, I prefer to pair a munro which is in my opinon the best global LS manager with an Aoris/Loftus/hyperion.
If you don't take a view of the world, you may as well buy an index hugging ETF, because the environment is going to get very tough from here on out. Place an each way bet and stack your chips in things like unlisted property and private equity to generate alpha. Most of the major super funds have of course already been doing this.
The challenge for HD is that its going to be very difficult to beat the market with their current portfolio. So he needs to do one of two things, sit a large part of the portfolio in cash and find a better entry point OR take some big positions on businesses with low weighting in the index that can outperforma the likes of the FAANGS. Both are challenging but not impossible.
MFG Price at posting:
$20.96 Sentiment: Hold Disclosure: Held
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