Funds fees query

darkpool

dunstonh wrote: »

With respect, you thought Inv Perp High income was a closet tracker. I don't think that puts you in a position to say they dont know about investments.

You say elsewhere that the tracker returned 22.61% while Per high income returned 23.36%. So the vast majority of Per High Income return was Beta? They didn't actually make much alpha return.

Does that not suggest it's a closet tracker?

pressuredrop_2

darkpool wrote: »

Does that not suggest it's a closet tracker?

No miners. No banks.

Is that a tracker?

darkpool

pressuredrop wrote: »

No miners. No banks.

Is that a tracker?

perhaps a fund manager wouldn't need to buy miners/banks to produce a closet tracker?

he might do something crazy like buying shares with different beta's that overall replicate an index?

you never ask yourself why there is little evidence to support active management? if i put my life savings into a product i'd want more evidence than marketing spiel. but i suppose we're all different

dunstonh

darkpool wrote: »

You say elsewhere that the tracker returned 22.61% while Per high income returned 23.36%. So the vast majority of Per High Income return was Beta? They didn't actually make much alpha return.

Does that not suggest it's a closet tracker?

The fact that over a 12 month period the return was not too far apart does not mean they are similar. You could have had corporate bond funds return a similar amount and they have nothing in common. A similar return in a very short period does not mean the assets are the same.

darkpool

dunstonh wrote: »

The fact that over a 12 month period the return was not too far apart does not mean they are similar. You could have had corporate bond funds return a similar amount and they have nothing in common. A similar return in a very short period does not mean the assets are the same.

But it is widely known that most actively managed funds secretly track the index. I believe the thinking is that it's better to be wrong in a crowd

I suppose if [STRIKE]mugs [/STRIKE] investors believe in active management it's up to them

dunstonh

But it is widely known that most actively managed funds secretly track the index.

Widely known by whom?

Legacy funds, such as those run by banks and insurance companies are often passive managed but that doesnt mean active managed funds are. No-one is saying you should invest in passive managed funds. Indeed, as already said in this thread, you should eliminate passive managed funds from your research.

I suppose if mugs investors believe in active management it's up to them

Call them what they like. The OP is probably very happy to be called a mug as he has had double the return of the tracker.

Hence the comments by Dunstonh that it depends on the markets. I can't see a lot of benefit in using active funds in the UK & US and most of my funds are trackers. I do have some more specialist active funds that are not suitable for trackers.

US nowadays and Japan are ripe for trackers. I still think UK has scope for managed. I wouldnt waste my time with a bog standard UK growth fund but a recovery/spec sits fund at the right time or an equity income fund still offer potential above the tracker. Europe is heading more to tracker with the rest of the mature markets but Opps/value funds there can still be worth consideration in my opinion.

jimjames

dunstonh wrote: »

US nowadays and Japan are ripe for trackers. I still think UK has scope for managed. I wouldnt waste my time with a bog standard UK growth fund but a recovery/spec sits fund at the right time or an equity income fund still offer potential above the tracker. Europe is heading more to tracker with the rest of the mature markets but Opps/value funds there can still be worth consideration in my opinion.

That was exactly my point. I have income and special sits funds as well as private equity funds but my core UK holdings are trackers.

I would have thought Europe would be more tricky for a tracker as country allocations would be more fixed and a good manager should have a lot more scope to outperform by ignoring those fixed country allocations and choosing good companies regardless of location.

dunstonh

I would have thought Europe would be more tricky for a tracker as country allocations would be more fixed and a good manager should have a lot more scope to outperform by ignoring those fixed country allocations and choosing good companies regardless of location.

I agree. The new european countries being fed all that development money puts them almost on par with emerging markets. The potential there is greater than the developed part. (i was thinking of those that want more general european when i said its heading that way)

This is the sort of thing where a managed fund gives you a more focused approach than a tracker and that gives you the potential for greater growth.

JamesU

Lokolo wrote: »

If the funds are in the same asset class, then no difference in risk.

What asset classes are being referred to here to reach this conclusion? Seems a bit over-generalised, at first glance at least?

JamesU

Lokolo

JamesU wrote: »

What asset classes are being referred to here to reach this conclusion? Seems a bit over-generalised, at first glance at least?

JamesU

I wouldn't say over generalised. A UK equity tracker fund is going to have the same sort of risk as a managed UK equity fund, a US tracker is going to have the same risk as a managed US fund etc.