Ftse

Midas

Chrismaths wrote:

And of course 80% of the All share is the FTSE 100, 17% FTSE 250, 3% Small Cap. Plot a chart of the all share against the FTSE 100, and you will see little difference, even over relatively large time periods.
IMO, Market cap should only be a consideration for liquidity, not for weightings. If you have a set of companies, some will be overvalued, some undervalued. By weighting by market cap you proportionally tend to get more of the overvalued ones. One of the criteria by which I judge funds is how little attention they pay to market cap weighted benchmarks. The less the better!

Sounds like a very sensible idea - how do you discover whether the funds do pay a lot of attention to market cap weighted benchmarks or not? Is this info published in fund literature?

CoasterJunkie

cheerfulcat wrote:

Hi, CJ,

Sorry, CJ, pet peeve;I know that everyone uses it but it's wrong. The word is averse, not adverse. I don't mean to single you out, it just bugged me a bit more than usual today. Sorry!

No probs...

Wow,lots of good gen. Thanks everyone.

I have had this fund for about 4 years now and it was recently producing a very good return.

I'm never averse to good advice...;)

EdInvestor - Page bookmarked..cheers!

Chrismaths

I'm an investment manager so I've built up a good knowledge of fund managers and how they do their job. I regularly meet fund managers, so I get to ask them face to face!

One site that will give you information that might be useful is https://www.trustnet.com If you look at the top 10 holdings of a fund, and then compare that to the top 10 of the FTSE, it's a pretty good sign that they are at least 'index aware' if there are big similarities in weightings.

When you read some of the blurb of funds - esp "alpha" funds, they say they don't pay attention to a benchmark, but when you actually kick the tyres and find out how they really behave, you find that they actually only overweight or underweight the benchmark weightings.

That said there are some cracking funds out there that do what they say on the tin, that are managed by brilliant people with yonks of experience. Good luck finding them!

EdInvestor

FWIW the top 20 cos in the index are:

1.BP PLC oil and gas
2.HSBC Holdings PLC bank
3.GlaxoSmithKline PLC pharmaceuticals
4.Vodafone Group PLC telecoms
5.Royal Bank of Scotland Group (The) PLC bank
6.Royal Dutch Shell PLC oil and gas
7.AstraZeneca PLC pharma
8.Barclays PLC bank
9.HBOS PLC bank
10.Anglo American PLC mining
11.Rio Tinto PLC mining
12.Lloyds TSB Group PLC bank
13.BHP Billiton PLC mining
14.Tesco PLC retail
15.Diageo PLC beverages
16.BG Group PLC gas
17.British American Tobacco PLC cigarettes
18.Aviva PLC insurance
19.Standard Chartered PLC bank
20.BT Group PLC telecoms

See how many banks and oil/gas/mining cos there are?

Have a look at the top 10 shares other funds are invested in and see if they are all on this list - if so the fund is like a tracker and may not be worth its higher management fee.

This website rates funds by performance:

https://www.citywire.co.uk/Home/Funds.aspx

While past performance is no guide to the future, in most categories there are a few funds in the top 10 which have long track records.....

Chrismaths

Here's the weights as well:
weight/share/price/currency/sector.

Notice how Shell has two listings, A & B shares - giving a total weight similar to BP. So you've got 17% in two companies in the same sector if you hold a FTSE 100 tracker! and around 40% in your top 5 companies!

8.69 BP PLC ORD USD0.25 6.00 GB GBP MINERAL EXTRACTION
7.72 HSBC HOLDINGS PLC ORD USD0.5 9.36 GB GBP Financials
6.11 GLAXOSMITHKLINE PLC ORD GBP0.25 14.58 GB GBP Consumer Goods
5.02 VODAFONE GROUP PLC ORD USD0.1 1.16 GB GBP Utilities
4.73 ROYAL DUTCH SHELL PLC-A SHS ORD EUR0.07 17.06 GB GBP MINERAL EXTRACTION
3.93 ROYAL BANK OF SCOTLAND GROUP ORD GBP0.25 17.24 GB GBP Financial
3.54 ROYAL DUTCH SHELL PLC-B SHS ORD EUR0.07 17.77 GB GBP MINERAL EXTRACTION
3.49 ASTRAZENECA PLC ORD USD0.25 30.63 GB GBP Consumer Goods
2.78 BARCLAYS PLC ORD GBP0.25 5.97 GB GBP Financials
2.60 HBOS PLC ORD GBP0.25 9.42 GB GBP Financials
2.15 ANGLO AMERICAN PLC ORD USD0.5 19.89 GB GBP MINERAL EXTRACTION
2.11 LLOYDS TSB GROUP PLC ORD GBP0.25 5.27 GB GBP Financials
2.10 RIO TINTO PLC ORD GBP0.1 27.47 GB GBP MINERAL EXTRACTION
1.87 TESCO PLC ORD GBP0.05 3.31 GB GBP SERVICES
1.83 DIAGEO PLC ORD GBP0.289 9.05 GB GBP Consumer Goods
1.74 BHP BILLITON PLC ORD USD0.5 9.82 GB GBP MINERAL EXTRACTION
1.66 BG GROUP PLC ORD GBP0.1 6.58 GB GBP Utilities
1.52 BRITISH AMERICAN TOBACCO PLC ORD GBP0.25 13.41 GB GBP GENERAL MANUFACTURERS
1.36 BT GROUP PLC ORD GBP0.05 2.27 GB GBP Utilities
1.26 AVIVA PLC ORD GBP0.25 7.30 GB GBP Financials
1.22 STANDARD CHARTERED PLC ORD USD0.5 12.83 GB GBP Financials

However, just because a portfolio contains these companies doesn't make it a tracker - If you pick a Blue Chip fund you most certainly would want most of these companies in it! What is important is the weightings - If the fund has broadly similar weights in these top 5 companies, it's decent evidence it's doing a bit of closet tracking.

EdInvestor

As you can see, times have changed since the tech boom.

Vodaphone is now a utility, pays a biggish dividend

homersimpson_3

That said there are some cracking funds out there that do what they say on the tin, that are managed by brilliant people with yonks of experience. Good luck finding them!

Can you provide some examples?

EdInvestor

Have a look on this site:

https://www.citywire.co.uk/Home/Funds.aspx

It rates all the funds in each category over 10 years, along with the managers.You always do need to keep an eye on funds to make sure the manager hasn't left.(Hence the "past performance is no guide to the future" warning).

But it's a comparatively easy thing to check and the career moves of the favoured ones are tracked by the personal finance press.

homersimpson_3

Have a look on this site:
https://www.citywire.co.uk/Home/Funds.aspx
It rates all the funds in each category over 10 years, along with the managers.You always do need to keep an eye on funds to make sure the manager hasn't left.(Hence the "past performance is no guide to the future" warning).
But it's a comparatively easy thing to check and the career moves of the favoured ones are tracked by the personal finance press.

why doesn't this site (or some other) have a list of them- or is this not possible? (e.g. manager, name of fund, dates they were there and what fund (s) they are managing now)

dunstonh

I think there is only so much they are willing to give away free. The paid for information has that sort of detail