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Funds fees query
Comments
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Do have a look at my profile: "I do not work in the financial services industry. I'm neither an IFA nor a mortgage advisor".
Since you didn't understand my post I'll try another way of explaining it to you. Start with the Trustnet list of the top performing funds over the last three years and see how they would presumably do on the Thames River result.
1. MFM Slater Growth + 102%. Rejected by TR: bottom quartile for volatility (yup, huge upswing in performance!)
2. First State Indian Subcontinent A GBP Acc + +92.9%. Rejected by TR: bottom quartile for 1 year volatility.
3. Fidelity UK Opportunities A +87%. Rejected by TR: bottom quartile for 1 year volatility.
4. Close Special Situations + 85%. Rejected by TR, bottom quartile for three year volatility.
Just work your way down the list and you'll find that the always top quartile for volatility filter eliminates the funds that performed best over the three years. That volatility isn't because they were bad, it's because they out-performed their peers, which generated higher volatility than them.
I don't know about you but I'm not inclined to eliminate from consideration funds that do very well just because they are high in volatility. Particularly not during recovery from major market and financial trouble when those are often the funds to be in. That volatility can be partly from the sectors they are in but it can also be from the companies they buy and the amount of leverage that they use.
But Thames River does have an incentive to cause people to eliminate from consideration such funds because of the nature of the funds that they run, which can be lower volatility because they can switch from sector to sector and because of the way they choose to manage the money. The report on which you based your comment wasn't a neutral study, it was intended to push a certain point of view which fits the funds that they sell.
if fund managers had skill would they not be able to be in the top quartile each year? once again someone is using individual funds as proof that active management is worth the fees.0 -
if fund managers had skill would they not be able to be in the top quartile each year? once again someone is using individual funds as proof that active management is worth the fees.
No, as explained time and time again, fund managers cannot overcome the power of the markets.
If they are a fund manager is say, Asia inc Japan. One year these markets prosper and they are in the top quartile, but then suddenly there is a natural disaster in Asia and the markets over there collapse. How is the manager still going to be able to compete and get into the top quartile with America, Europe, Commodities, Bonds etc. when there's been such a market downturn in their area?0 -
was it not you that said that only 35% of funds outperformed the market?
Yes!! But as an intelligent active investor I won't leave my money in underperforming funds that, as others point out, are constrained by their speciality and hence can not beat the index ALL the time.
In much the same way, if I invested my cash in a market leading savings account I wouldn't dream of leaving it there when the rate fell to 0.1% after 5 years.
A tracker will do what it says on the tin. Track the index. It will beat 65% of active funds which are NEITHER tracking the index NOR designed to do so. They are apples and pears.
I, and hundreds of thousands of investors, simply don't want to follow the index like lemmings.If the ball had gone in the net it would have been a goal.If my Auntie had been a man she'd have been my Uncle.0 -
round and round the garden..... not getting anywhere here. We are just repeating the same things and its largely being ignored.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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exactly, fund managers aren't that good.
that TR survey compared funds in their own sector. Not to other sectors.
Yes and trackers can't overcome the markets either - what's your point?
Fund managers can be good, and when they are good, they make trackers look like ants
And the TR was compared altogether, not as separate sectors.0 -
Yes and trackers can't overcome the markets either - what's your point?
Fund managers can be good, and when they are good, they make trackers look like ants
Using that thinking the national lottery is a good investment? After all you could invest a pound and make millions.
But on average active funds don't deliver........0 -
I dont have any bias. My portfolio has significantly outperformed the index and cash over the last 20 years even after fees. I wouldn't still be holding investments if it hadn't. I'd be in cash or stuffing the money under my mattress. That's good enough for me.
As Dunstonh says... round and round.... I've wasted enough time banging my head against a brick wall in here.
Time to move on... profits to be made.
If the ball had gone in the net it would have been a goal.If my Auntie had been a man she'd have been my Uncle.0
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