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Help me rebalance my failing S&S ISAs Portfolio - Sept 2011
Comments
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No.
They are run by well respected fund managers who have excellant track records at outperforming the market.
So the FSA is wrong to have the warning below?
Past Performance is No Guarantee of Future Results0 -
Good grief get a grip!!
What the heck has that got to do with the price of wet fish?
You asked me a question...
To which I gave a straight answer:do you not think it possible that your 2 funds were just lucky?No.
They are run by well respected fund managers who have excellant track records at outperforming the market.
Your FSA warning applies to ALL funds including the beloved low fee Tracker ones. I fail to see any relevance to your suggestion of the FSA being wrong.
I despair... I really do.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 -
Your FSA warning applies to ALL funds including the beloved low fee Tracker ones. I fail to see any relevance to your suggestion of the FSA being wrong.
ehhhmmm i believe that the FSA is right to say that past performance is no guide to future performance. it seems to be you that ignores the FSA advice.......
Below is from Standard and Poor.....
"The phrase “past performance is not an indicator of future outcomes” is a common fine print line found in all mutual fund literature. Yet due to either force of habit or conviction, both investors and advisors consider past performance and related metrics to be important factors in fund selection.
Does past performance really matter? The semi-annual S&P Persistence Scorecard seeks to track the consistency of top performers over three- and five-consecutive year periods, and measure performance persistence through transition matrices for three- and five-year non-overlapping holding periods. As in our widely followed Standard & Poor’s Indices Versus Active Funds (SPIVATM) Scorecards, the University of Chicago’s CRSP Survivorship Bias Free Mutual Fund Database underlies our analysis.
Very few funds manage to consistently repeat top-half or top-quartile performance. Over the five years ending September 2009, only 4.27% large-cap funds, 3.98% mid-cap funds, and 9.13% small-cap funds maintained a top-half ranking over the five consecutive 12-month periods. No large- or mid-cap funds, and only one small-cap fund maintained a topquartile ranking over the same period.
Looking at longer term performance, 24.32% of large-cap funds with a topquartile ranking over the five years ending September 2004 maintained a top-quartile ranking over the next five years. Only 16.39% of mid-cap funds and 27.06% of small-cap funds maintained a top-quartile performance over the same period. Random expectations would suggest a repeat rate of 25%.
Our research suggests that screening for top-quartile funds may be inappropriate. A healthy plurality of future top-quartile funds comes from the prior period’s second, third and even fourth quartiles. Screening out bottom quartile funds may be appropriate, however, since they have a very high probability of being merged or liquidated."0 -
ehhhmmm i believe that the FSA is right to say that past performance is no guide to future performance. it seems to be you that ignores the FSA advice.......
Yes... the FSA are right to make that statement..... but why on earth are you dreaming up that I'm ignoring it when I chose a fund? I've been investing in funds for over 25 years and make my fund selections based on a number of criteria and extensive reaseach none of which has yet included trolling advice.
You're using a standard disclaimer to try and dismiss my fund selection and support your point of view when every man and his dog knows that the FSA statement applies to every fund out there.
As noone can look at future performance, unless you beleive in Russell Grant and fairies at the botom of the garden, past performance can only be used as a guide to help make informed judgments as PART of a fund selection. That applies equally to both active managed funds and trackers. I would equally look at past perfromance of a commodity tracker as I would with a commodity based fund.
I've never seen so many tangents since I last studied A Level maths and I really think there is more chance of one of us winning the X-Factor than this farcical non-debate, to which there is no absolute final answer...
.... unless the answer is 42.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 -
You're using a standard disclaimer to try and dismiss my fund selection and support your point of view when every man and his dog knows that the FSA statement applies to every fund out there.
so what about the article from standard and poor? what does that suggest about consistency of performance.....
look at the paragraph that i put in bold. if managers had real skill would you not expect funds to be in the top quartile for recurring 5 year periods?0 -
In this scorecard, we reference random expectations because they set a benchmark for the usefulness of screening funds based on past returns. The fact that in many cases the repeat rates are higher than random expectations suggests that past performance
should not be dismissed as completely irrelevant.
Standard & Poors
Living for tomorrow might mean that you survive the day after.
It is always different this time. The only thing that is the same is the outcome.
Portfolios are like personalities - one that is balanced is usually preferable.
0 -
The full paragraph is below......
In this scorecard, we reference random expectations because they set a benchmark for
the usefulness of screening funds based on past returns. The fact that in many cases
the repeat rates are higher than random expectations suggests that past performance
should not be dismissed as completely irrelevant. However, we believe the common
practice of screening for funds based on current top-quartile rankings may be
inappropriate for the following reasons: The low absolute counts of repeat top performers suggest that past performance
cannot be the sole or most important criteria in fund selection. Furthermore, the transition matrices of Report 3 and 4, found at the end of the paper,
suggest that a healthy percentage of current top-quartile funds come from prior
period second or third quartiles. This is illustrated in the charts found on the next
page. Therefore, advisors and consultants who use granular rankings such as
quartiles, or even quintiles and deciles, may be missing out on funds that should
belong to their initial selection set.
There does seem to be some logic in deeply scrutinizing or even screening out bottomquartile
funds. Many of the bottom quartile funds are subsequently merged or liquidated.
Clearly, asset management companies do not want to have laggards in their advertised
line-ups.0 -
:D:rotfl: Living for tomorrow might mean that you survive the day after.
It is always different this time. The only thing that is the same is the outcome.
Portfolios are like personalities - one that is balanced is usually preferable.
0 -
so what about the article from standard and poor? what does that suggest about consistency of performance.....
You asked if the funds I selected had beaten the index out of luck ... the answer was a definitive NO... and one has CONSISTANTLY been a top performer.
The £49m Cavendish Opportunities fund is a top-quartile performer over one-, three-, five- and 10-year periods. It has returned 156.28 per cent in the last decade, outperforming its FTSE Small Cap ex IT benchmark by more than 115 per cent
I dont give a flying fig for diversionary tactics about averages etc... You asked a direct question to which I have now answered twice with a direct answer.
Having been in a couple of identical head-banging circular threads before I'm at a loss as to what part of some active funds being capable of significantly beating the index some of the time you dont grasp.
Oh BTW
....welcome to my ignore list. Enjoy. 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 -
If the choice is between managed fund 'x' or tracker 'y', it's irrelevant whether or not 'x' is top quartile - 'x' just needs to perform better, after charges, 'y' to be worthy of investment. Consistent second quartile performance should be sufficient to do that. Often, simply keeping out of the bottom quartile is sufficient if a couple of good years are thrown in. Some sectors you'll have trouble finding a fund with a good enough record to give you confidence to invest, but for others the tracker consistently lags behind (or there is no appropriate tracker).so what about the article from standard and poor? what does that suggest about consistency of performance.....
look at the paragraph that i put in bold. if managers had real skill would you not expect funds to be in the top quartile for recurring 5 year periods?
It's certainly nice to see a fund in the top quartile for 5 consecutive years (I hold a couple that have managed that), but I don't expect it when I invest. The odd bad year is not a problem as long as the good years can compensate for it.0
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