Funds fees query

darkpool

Lokolo wrote: »

And your reasoning of why they have many funds is wrong. They have many funds because they are all in different areas; they have UK equity, they have Europe equity, emerging market etc. which are based on different risk profiles. If they only did one type of fund it would be rubbish, they'd be stuck in a very small market which limits growth = bad business sense!

they really need 500 funds to do that? would it not be economical to have less funds.....

Lokolo

darkpool wrote: »

you ever study maths outside primary school?

Yes I have...... I did A Level maths

Your comment does not make sense.

darkpool

Lokolo wrote: »

To pay for my bonuses.

yes, exactly.

Lokolo

darkpool wrote: »

yes, exactly.

I was being a little sarcastic in that post, but you haven't posted any figures about the costs, so at the moment you are just speculating.....

Why don't you get some actual figures to see where the money is actually going?

JamesU

freemoneyrocks wrote: »

I've been investing in Invesco perpetual's high income fund for approx 18 month. What is the difference between this fund and a tracker fundand and am I being stitched up on the fees?? Presumably the idea is that IP manage the fund and outperform the trackers to justify the fee??

Assuming the Invesco fund does add alpha relative to a tracker alternative and is desirable, important to bear in mind the annual fee can be reduced significantly depending on provider. For example Alliance Trust provides very good annual rebates on many popular funds including Invesco. But need personal analysis of one off purchases (£12.50/trade AT, free at HL) vs cost averaged regular purchases through AT's i-invest platform at £1.50/trade, then decide which is best depending on how you buy/sell/rebalance, and size of purchases relative to dealing costs. I think Alliance Trust is very good on their reduced annual fees, interesting funds with rebates of 0.5-0.7%/yr, relative to Hargreaves Lansdowne.

Annual cost of funds in list here:

http://www.alliancetrustsavings.co.uk/pdf/list-of-funds.pdf

JamesU

talexuser

a good point by JamesU about fees. I'm with an intermediary that rebates the 0.5% annual commission - different from the initial 5 or thereabouts % you can get discounted when buying in.

These annual rebates are reinvested in units as you go along for compounding or just put in your pocket to spend and makes the value of a good performing fund even better than a tracker with no annual rebates.

kar999

I think it's fairly clear to all where you stand in this debate darkpool and fair play to you for sticking by your guns.

The OP’s question has been answered. The particular active fund in question (Invesco High Income) beats a typical low fee tracker fund (HSBC FTSE 100) as the graphical evidence above clearly PROVES over both 5 years & 18 months. As JamesU also states, there is also scope to reduce active fund fees further and improve the gain.

No one is disputing the fact that SOME tracker funds will outperform SOME active funds SOME of the time. NOT all of the time, but some of the time.

Perhaps if you could also accept the FACT that SOME active funds will also beat SOME tracker funds, even after fees, we could all move on.

One size does not fit all. The index can be beaten SOME OF THE TIME, even after fees, if you are brave enough and/or wise enough, to make the right choices at the right time.

There are no guarantees in any risk based investment and there are no cast iron right or wrong strategies.

You invests your money (with or without an IFA) and takes your choice.

dunstonh

darkpool wrote: »

ehhmmmm because managed funds have a wider performance distribution. but overall (ie average) returns are lower than trackers.

is that not type of obvious?

That does not make any sense.

darkpool

dunstonh wrote: »

That does not make any sense.

I must apologise for expecting an IFA to know about gaussian distibutions.

Perhaps Lokolo could look out his A level maths books and explain what they are?

Aegis

darkpool wrote: »

I must apologise for expecting an IFA to know about gaussian distibutions.

Perhaps Lokolo could look out his A level maths books and explain what they are?

You missed the point again. If trackers appear mid-table, then if you assume a normal distribution of active manager performances the average will be more or less where the trackers are.

If you then eliminate the passive managed funds and the funds with track records of woeful performance, where will that leave the average of the remaining funds?

Also, why are you being quite so offensive to the people who disagree with you? Questioning someone's education just because they disagree with you seems extremely childish.