Vanguard direct to customer offering confirmed

87.2% of actively managed UK equity funds underperformed their benchmarks in 2016 but in 2015 only 22.2% underperformed. These numbers don't take in to account funds that are closed by providers.

The FCA's 2016 report on the subject concluded that active management generally struggles to beat the market after costs (link to report in FT link below).

I'd thought that active management had an advantage in the more niche areas where equities hadn't been analysed to death but Monevator has linked research showing this isn't the case and the graph posted up thread emphasises this.

https://www.ft.com/content/3fceed90-13ae-11e7-b0c1-37e417ee6c76

Whatever the relative performances of active vs passive I think that a multi index tracker fund that does some automatic rebalancing is by far the best way for the average person to invest. It provides simplicity and diversity and avoids all the active manager hype and hyperbolae. A passive approach will not give the maximum potential returns, but it will maximize the probability of success. If people want to save a bit on fees they can reproduce a multi-index fund with individual ETFs and rebalance themselves.

hennerz wrote: »

:rotfl:

Ok, keep your head in the sand trying to pick the 1 in 10 funds that beat the market...

I seem to manage it regularly. As do many other investors in the UK. Mainly as they are not blinkered to the passive bias that some people like you have. Where passive is best, it should be used. Where managed is best, it should be used.

....70pc of actively managed European funds beating the best European tracker over 10 years. Among Asia funds, 55pc of active portfolios beat the best tracker over a decade, while the figure for the UK was 52pc.
Forty-eight per cent of global funds with human managers outperformed the best passive fund over 10 years, compared with 38pc of Japanese funds. In last place were active US funds, only a third of which managed to beat the top tracker.
Overall, 50pc of active funds beat tracker funds over the past decade. The figures are net of fund charges (and remember this includes the charges back from the bundled days and not unbundled world we live in now. These are UK domiciled funds priced in GBP.

Obviously there are many sectors and geography conventrations i want which vanguard dont currently offer so for then i will keep hl

cashbackproblems wrote: »

Wow loving this i have just opened an account and set up a monthly dd. Also will be selling all of my vanguard holdings from hl in the coming days and transferring, once the press gets hold of this and people are aware HL are going to lose a lot of money. Ifa also!

Why will IFAs lose money ? The services they offer are different to those of the D2C market as are their customer base. Advised clients aren't solely driven by price, yes it's a factor but not Number 1. DFM affiliation for model portfolios etc. via IFAs, tax planning etc. is way out of Vanguards remit here.

Also, guidance here for you should be NOT to sell all your Vanguard holidings ! Keep them invested in the market but instead request HL to Re Register them across to your new Vanguard account.

There's no point exposing yourself to Cash Out into the market when you can stay invested and simply transfer administration of your assets to another Platform.

Hope that helps !