We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Investment Trusts Trounce Unit Trusts
Options
Comments
-
ITs outperform UTs? What - all of them?
The data doesn't suggest that, no. However, it does tell us that choosing the UT that will out perform an IT and/or passive investments is close to impossible other than in the rear-view mirror.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
What's happening with the regulations next year and when?
Rather than IFAs getting kick-backs from the fund managers, they will have to be paid via up-front fees. The outcome will hopefully be that investors are steered towards the lower cost (and hence better performing) vehicles such as ITs, low-cost trackers, and direct equity holdings.
One might hope that this will result in consolidation in the fund management industry. Currently we have over 3000 of them and they are taking about £7bn from our investments in fees every single year.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Ark_Welder wrote: »Myself, I use both closed end and open ended funds depending upon the asset class, the platform provider and the fund manager.
I still hold some funds (I was young and foolish!) but intend to move away from them over the next six months. However, some of my funds *do* seem to be doing a good job in their sector, which causes me some internal conflict.
How do you decide whether to use a fund, IT or tracker?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »The data doesn't suggest that, no. However, it does tell us that choosing the UT that will out perform an IT and/or passive investments is close to impossible other than in the rear-view mirror.
Or vice versa.0 -
So average ITs will outperform average UTs.
What is an "average" UT. What does it invest in? What is an "average" IT? The whole concept seems a little meaningless.
Perhaps the average red motor vehicle has a better acceleration then an average black motor vehicle. Therefore if I paint my old banger red it will go faster.0 -
gadgetmind wrote: »I still hold some funds (I was young and foolish!) but intend to move away from them over the next six months. However, some of my funds *do* seem to be doing a good job in their sector, which causes me some internal conflict.
How do you decide whether to use a fund, IT or tracker?
Clearly as a true believer you must sell your well performing managed funds and go for an IT/tracker confident in the knowledge that you will get better returns by doing so.
Actually this raises an interesting question - how many tracker ITs are there?0 -
Perhaps the average red motor vehicle has a better acceleration then an average black motor vehicle. Therefore if I paint my old banger red it will go faster.
http://en.wikipedia.org/wiki/Non_sequitur_(logic)
BTW, if you haven't already read "Smarter Investing" by Tim Hale then I suggest you grab a copy. It explains why funds under-perform more passive investments, and why using either the rear-view mirror or backing a "star manager" are extremely unlikely to deliver long-term rewards.
Of course, this is as much an argument against ITs as it is against UTs, but at least ITs benefit from lower fees, a less "flash in the pan" investment style, modest gearing, and dividend reserves.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Clearly as a true believer
?you must sell your well performing managed funds and go for an IT/tracker confident in the knowledge that you will get better returns by doing so.
I perfectly happy with an approach that's statistically and historically shown to deliver better returns, which is lucky as there are no rock-solid guarantees available.
The UTs I will have trouble parting with are the likes of M&G Global Basics, and a couple of the First State specialised funds. However, the more general UK/Global/European funds can easily be replaced with trackers, and I'll probably drift back into bonds and gilts towards the middle of next year.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »http://en.wikipedia.org/wiki/Non_sequitur_(logic)
BTW, if you haven't already read "Smarter Investing" by Tim Hale then I suggest you grab a copy. It explains why funds under-perform more passive investments, and why using either the rear-view mirror or backing a "star manager" are extremely unlikely to deliver long-term rewards.
Of course, this is as much an argument against ITs as it is against UTs, but at least ITs benefit from lower fees, a less "flash in the pan" investment style, modest gearing, and dividend reserves.
What outperforms are the right mix of sectors. The differences due to sector performance are far greater than differences in investment vehicle performance.
In most sectors that interest me there are no passive funds or where there are passive funds the performance is significantly worse than average.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.2K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.1K Work, Benefits & Business
- 599.2K Mortgages, Homes & Bills
- 177K Life & Family
- 257.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards