Emerging Markets and Commodities

Linton

I little thought would show that cannot explain the numbers.

Methinks your prejudices are getting in the way of making rational investment decisions. Fine if you dont want to question your prejudices but not a good basis for maximising wealth. And certainly not something to foist on un-suspecting newbies.

If you believe your assertion that the majority of EM funds perform worse than their Index, how about some evidence?

Jegersmart

I don't hold any tracker funds and am unlikely to do so tbh. You only have to take a look at some graphs to see what the main issue is - in addition some trackers are following an index that has perhaps less transparency in terms of its constituents than a FTSE tracker. I pay between 1.25% and 1.9% for my managed holdings depending on the fund - and taking those extra costs into account have massively outperfomed the index in any case.

Remember that a tracker is just like buying a basic share, your entry point becomes much more relevant. In the case of the FTSE I would probably not even consider buying one unless the FTSE100 is below 4800 or so. To charge me even 0.4% for a vehcile that blindly follows an index is very poor value to me at least. IMHO, DYOR

Jegersmart

gozomark wrote: »

emerging market fund managers tend to underperform their benchmarks - why ?

1. high dealing charges
2. insider trading in many emerging markets by local conglomerates

lol, just lol

IMHO, DYOR

SteveSilva

Some good replies there, its not so clear to me when a fund is a tracker or managed. I know Index usually means tracker and have lower fees, but its not always clear. Isn't there a simple way of telling?

Jegersmart

SteveSilva wrote: »

Some good replies there, its not so clear to me when a fund is a tracker or managed. I know Index usually means tracker and have lower fees, but its not always clear. Isn't there a simple way of telling?

If you go to Trustnet as already advised and perform a search on "Index Linked" type funds as per this:

http://www.trustnet.com/Investments/Perf.aspx?ctr=QS&univ=U&Pf_AssetClass=I:IDXL

These will not all be trackers as you may know them but you can see which has performed best, what the underlying index is and when you click in on the various funds see what the cost (TER) is and so on. Trustnet is a good tool for Funds in general.

Depending on your platform provider (Fidelity, HL, your bank etc) you may not have access to all funds - I think the last time I checked my GF's Barclays options on her account she only has access to around 30 funds.

Let us know how you get on.

Jegersmart

The above is for Fixed Income Index-linked, this is for some examples of trackers availbale from Fidelity, there are probably also others:

https://www.fidelity.co.uk/investor/siteindex/searchallresults.page?userType=Direct.segment&&Ntt=index&N=0&Nty=1&Nr=p_RecType:F&SearchType=Funds

SteveSilva

In the opinion of board members What are the best trackers in the Emerging Markets and Natural Resources Indicies?

pressuredrop_2

SteveSilva wrote: »

What are the best trackers in the Emerging Markets and Natural Resources Indicies?

What happened to Aberdeen and JPM?

I guess they're underperformers.

SteveSilva

I was under the impression they were managed funds rather than simple trackers which charge less?

Linton

SteveSilva wrote: »

In the opinion of board members What are the best trackers in the Emerging Markets and Natural Resources Indicies?

The only one in EM I can see is the L&G EM Index. This has only been running for about 6 months so there is no meaningful data on how well it performs. However if you assess the data I gave in a previous post perhaps you can make your own predictions.

To what extent this really is a tracker isnt clear to me as someone somewhere has to decide what proportions of the fund should be invested in which country. Once you have decided on the country you can then chose the company automatically on size. But for example if you chose the country automatically on size your portfolio would be swamped by the very large markets.

When I look up the Index it claims to be following it would seem its more a dataset of various options than a simple single index. So perhaps someone can explain how it works.

In Nat Res there dont seem to be any tracker funds - again you have the problem of how you decide which Resource you invest in. Its not clear to me how you would do that automatically. You cant do it simply on market size - I guess if you did everything would be invested in things like oil, coal and iron ore.

In both these areas, if you really want to go down the automated portfolio approach you would need to decide the detailed countries/resources you wanted to invest in yourself and try and find a set of ETFs. This may not be practical if you were a small investor, when it would be much easier to put your £5K or whatever into a managed fund and let the manager handle the asset allocation.

In both EM and Nat Res the managed funds are very diverse, often investing in quite different things and so there is no single definitive Index available. The areas where trackers may have some value such as a FTSE100 are of a quite different character. Any FTSE based fund, whether tracker or managed is going to be holding much the same shares in slightly different proportions.