A very large sum - where do I start?

dunstonh

What I'd really like to see are managers/advisors offering data on their performance in the same way as is available for unit trusts. Are there reasons why this doesn't seem to be done, or is it? Is it because in the nature of things the performance for most will be "average" at best and so misunderstood?

I have a piece of software called Itrak that does it. However, it only does it on unit trust/oeic funds. Although the way things are nowadays, they account for most of the business. A similar offering is available on morningstar with their £100pm fee but it doesnt take into account reinvestment/rebalancing etc. It takes the current fund spread and factors that backwards. I believe Financial Express analytics does something similar for advisers as well but costs a lot more.

So, yes it is available as long as the IFA pays for the software. Some do, some dont.

Also known as a "trailer commission," this fee is paid annually for as long as the investor holds shares in the fund.

I have only ever heard it referred to as trail or fund based commission. I think the wiki entry may be more US speak than EU.

About 10 years ago they were the flavour of the month and exaggerated claims were made. At the same time I found them to have their uses. The L&G Allshare tracker had a very low offer to bid which meant it could be used to jump in and out of markets at very low cost - far less than the spread + stockbroker fees for an allshare basket.

Neither the FTSE all share of the FTSE 100 trackers have managed to outperform the UK all companies sector average in 13 years.

Isn't it correct that the average managed fund will always underperform the relevent index?

In a rising market you would expect the tracker to be near the top of the pile. In a falling market you would expect the tracker to be near the bottom of the pile. The lack of downside protection helps it on the way up but hinders it on the way down.

They have their place and I have used them in a portfolio. Its the single fund investors who use a tracker that I am more negative towards.

Flynn_2

prudryden wrote:

The firms previously listed above will have departments that deal exclusively with retail clients as opposed to institutional.

Pru, do you know how well any of the firms you've mentioned have performed for clients or have URLs for details?

dunstonh wrote:

Neither the FTSE all share of the FTSE 100 trackers have managed to outperform the UK all companies sector average in 13 years.

That doesn't surprise me. I assume that takes into account all costs, for the L&G Allshare that's 0% initial, 0.5% management? Would it be wrong to assume though that it's outperformed at least some managed funds that were sitting near the top and bathed in glory at some point during that time and heavily sold?

dunstonh

That doesn't surprise me. I assume that takes into account all costs, for the L&G Allshare that's 0% initial, 0.5% management?

Yes.

Would it be wrong to assume though that it's outperformed at least some managed funds that were sitting near the top and bathed in glory at some point during that time and heavily sold?

Neither the L&G FTSE all share tracker or the L&G FTSE 100 tracker have ever appeared in the top half since they were launched.

F&C have an all share tracker that has been runnning 18 years and that has never once had a year in the top half.

..of course, trackers are more heavily bought than sold.

prudryden

Flynn
Google the names - with UK after. In order to get performance reports, you will probably have to meet with them as they will have different returns for different objectives - also are you interested in Absolute returns or Relative returns. Ask what the manager's philosophy is: Is he a Warren Buffet type - buy and hold forever. Is he a Peter Lynch type - only average returns for the majority of the portfolio with that occasional "ten bagger" i.e. one or two holdings that increase ten fold of its value that sends his portfolio into high returns.

Flynn_2

Thanks Pru. I'll get myself up to speed so I've half a clue what I'm about, there doesn't appear to be any way to avoid it, then do some shopping.

Chrismaths

Are there reasons why this doesn't seem to be done, or is it? Is it because in the nature of things the performance for most will be "average" at best and so misunderstood?

Like Dh, we'll show actual porfolios to potential clients if they ask, but by its very nature, what we offer to clients is bespoke, so fair and true comparisons are difficult.

The firms previously listed above will have departments that deal exclusively with retail clients as opposed to institutional. I agree that 1/2 million would be considered small, but for a managed account, it would generally be acceptable. Failing that, you could try some of the smaller ones, although by no means small, such as Morgan Stanley, Raymond James Investment Services, Barclays Wealth Management.

Morgan Stanley's services I don't know too much about, Barclays Wealth Management are incredibly expensive and not really any good.

Interesting that you should bring up Raymond James Investment Services - They are not actually a firm that offer services like that as such - they are more of a network for stockbrokers and investment managers. They are a way for people to run their own business (or branch in RJIS-speak) whilst having their back-office outsourced - so it's a very broad church, from people like iFunds (who run portfolios based exclusively on ETFs and quant risk management) through to investment specialist IFAs. I know because we are in the process of leaving them! Ed's link to APCIMS is a useful one - but again the caveat that it's not a homogenous set of services.

Out of interest pru, what do you do?

EdInvestor

Flynn wrote:

Thanks Pru. I'll get myself up to speed so I've half a clue what I'm about, there doesn't appear to be any way to avoid it, then do some shopping.

First, maybe you should take a look at the High Yield Portfolio.

I'd say it's ideal for someone with a big dollop of money who finds investing really boring Just buy and forget. Much the same income return as in the bank, but lower tax (if any) and a very good long-term capital growth record. No effort required after setup, and virtually no charges.

Enjoy. .

dunstonh

Just buy and forget.

No investment portfolio should be buy and forget. Especially a large one. It wont be too long before the risk profile of your investments get out of sync and the portfolio no longer matches what you set up.

prudryden

EdInvestor wrote:

First, maybe you should take a look at the High Yield Portfolio.

I'd say it's ideal for someone with a big dollop of money who finds investing really boring Just buy and forget. Much the same income return as in the bank, but lower tax (if any) and a very good long-term capital growth record. No effort required after setup, and virtually no charges.

Enjoy. .

I always liked the concept. Sort of a variation on the Dogs of the FTSI and the Dogs of the Dow, where you buy the 10 highest yielding stocks of the index or the five lowest priced of that 10. Hopefully, in a bear market, the dividends will give you some support. Unfortunately, it didn't work for General Motors not too long ago. But that was an exception.

EdInvestor

I always liked the concept. Sort of a variation on the Dogs of the FTSI and the Dogs of the Dow, where you buy the 10 highest yielding stocks of the index or the five lowest priced of that 10.

No, that's a different strategy again - a mechanical one. Not related to the HYP, which has a range of filters in addition to the yield built in to reduce risk.

It wont be too long before the risk profile of your investments get out of sync and the portfolio no longer matches what you set up.

This is not a problem.It's meant to be like that.