Hargreaves Lansdown - tomorrow's winners

dunstonh

thrupence wrote: »

Bestinvest do a rather interesting fund manager rating where they assess whether a manger was just lucky in his choices or did he actually actively add value. Dunno how they work this out, but you can access it here: http://www.bestinvest.co.uk/investment-research/manager-research/top-managers.aspx But the other interesting thing is that even their top rated managers don't beat the benchmark index by anything like the charges they make for their funds. Typically a top manager might add a value of 0.8% per annum for example, but be charging 1.75% for his services and that's without all the other trading charges that are involved in fund management. I suppose you just have to look at fund charges as as an expense incurred, which is reasonable enough.

Most returns are treated as being net of the published retail charge. So, unless it says different (I havent checked) I would them to be using net of charges returns.

sabretoothtigger

thrupence wrote: »

Bestinvest do a rather interesting fund manager rating where they assess whether a manger was just lucky in his choices or did he actually actively add value. Dunno how they work this out, but you can access it here: http://www.bestinvest.co.uk/investment-research/manager-research/top-managers.aspx But the other interesting thing is that even their top rated managers don't beat the benchmark index by anything like the charges they make for their funds.

The top guy there got 130% in 2008. Last year he didnt do that well though he applied roughly similar tactics

Alot of it is your own placement and timing I think. If you got both those perfect just stick to trackers, if you need some help thats where the manager comes in.

I use more managed funds when Im really unsure which asian market would be best, I let them take the responsibility for choosing rather then trying to guess from thousands of miles away if india is overvalued or japan too cheap.

I noticed sf junior gold fund got like 120% since Sept. He choose some of the smaller companies really well but it was also the timing as it was flat for 6 months before that

mutley74

p.s when you do sus out what could be tomorrows winners please let us know:)

koru

thrupence wrote: »

Bestinvest do a rather interesting fund manager rating where they assess whether a manger was just lucky in his choices or did he actually actively add value. Dunno how they work this out, but you can access it here: http://www.bestinvest.co.uk/investment-research/manager-research/top-managers.aspx But the other interesting thing is that even their top rated managers don't beat the benchmark index by anything like the charges they make for their funds. Typically a top manager might add a value of 0.8% per annum for example, but be charging 1.75% for his services and that's without all the other trading charges that are involved in fund management. I suppose you just have to look at fund charges as as an expense incurred, which is reasonable enough.

They explain how they calculate the MRI here:
http://www.bestinvest.co.uk/investment-research/manager-research/our-approach.aspx

They add the charges to the relative performance, so I take it that the relative performance is net of charges, as suggested by Dunstonh.

I don't really understand the explanation about how they calculate the MRI, but I get the impression they are just measuring monthly consistency. That is, a manager who delivers 1% outperformance every month will have a much higher MRI than a manager who delivers 12% performance one month per year and who matches the index the other 11 months. I am not sure I am convinced that they can confidently say that this indicates whether or not the manager is delivering outperformance by luck or by skill.

Interesting to note that if you look at average outperformance over the manager's career, rather than just a few years, the outperformance is pretty small. Even Neil Woodford has only outperformed by 0.28% on average over his career. However, compounding that over many years, the cumulative outperformance is still well worth having. And apparently Bestinvest think there is a 99.9% probability that he managed this through skill rather than just luck.

StevieJ

If that Psigma income fund can be in the top H&L 150 then anything can, terrible performer.

mutley74

StevieJ wrote: »

If that Psigma income fund can be in the top H&L 150 then anything can, terrible performer.

agree its had a pretty tought time. So has the Blackrock UK absolute! I have started to reduce my holding in this one due to very poor performance over the past few months. In fact i do think the Absolute type funds have been overrated and over advertised.

dunstonh

In fact i do think the Absolute type funds have been overrated and over advertised.

Fashion investing

le_loup

mutley74 wrote: »

i do think the Absolute type funds have been overrated and over advertised.

... and overcharged with performance fees! The last of these that I looked at takes the usual 1.5% and then takes 20% if it performs over LIBOR! LIBOR!
And people still buy these funds.

sheslookinhot

mutley74 wrote: »

agree its had a pretty tought time. So has the Blackrock UK absolute! I have started to reduce my holding in this one due to very poor performance over the past few months. In fact i do think the Absolute type funds have been overrated and over advertised.

The Sunday Times ran an article in recent weeks about the underperformance of absolute funds

sabretoothtigger

I liked the look of this absolute fund by L&G maybe:

Legal & General European Absolute

underperformance of absolute funds

I thought the idea of them was slow but sure upside with good chances of avoiding rapidly depreciating assets even in rough markets
Artemis might have an ok one also though its more a low risk specialist fund I think