Fund managers

Xbigman

Of course funds need to earn more by the amount they charge, next youll be saying mcdonalds have to charge more for their burgers than it costs them

You won't believe the number of people who don't even think about it, let alone work out the basic fact above.

Probably the same number of people who don't work inflation into their returns.




X

IronWolf

You actually have 3 options.

1. Requires by far the most effort, you learn to invest yourself, which involves a lot of reading and a lot of effort

2. You invest in managed funds, which involves some research over funds and managers

3. You just invest in index trackers, no work needed and the charges are very low.


Some will argue which of 2. and 3. gives the best returns, but option 1. depends entirely on you and how much effort you put in, and how competant you are.

darkpool

Lokolo wrote: »

Then you need to read a lot more. Thats hardly intelligent, its common bloody sense.

Of course funds need to earn more by the amount they charge, next youll be saying mcdonalds have to charge more for their burgers than it costs them!

i do read a lot, i've read countless articles saying that active management isn't worth the fees. then when these arguments are presented on this forum the same silly people use the counterargument "perp high income has done well". a counter argument best described as feeble....

i honestly think the level of financial knowledge shown by a lot of posters in this forum is shocking. i also find it amazing how people ignore the evidence concerning the value of active management, but continue to bleat on about their system for ignoring the dog funds.

it's a bit like robin hood in reverse, poor people willingly giving their money to the rich city folk.

Lokolo

darkpool wrote: »

i do read a lot, i've read countless articles saying that active management isn't worth the fees. then when these arguments are presented on this forum the same silly people use the counterargument "perp high income has done well". a counter argument best described as feeble....

i honestly think the level of financial knowledge shown by a lot of posters in this forum is shocking. i also find it amazing how people ignore the evidence concerning the value of active management, but continue to bleat on about their system for ignoring the dog funds.

it's a bit like robin hood in reverse, poor people willingly giving their money to the rich city folk.

I find it disappointing that you constantly rule out one type of fund or investment because not all of them do well. It's the same reason why people are racist/sexist/etc.

To say that no-one should buy active management because not all of them do well is just as bad as saying all Muslims are bad because a few of them are terrorists. Generalisations are bad, and you can't seem to get your head about any of that in any of your posts.

darkpool

Lokolo wrote: »

I find it disappointing that you constantly rule out one type of fund or investment because not all of them do well. It's the same reason why people are racist/sexist/etc.

To say that no-one should buy active management because not all of them do well is just as bad as saying all Muslims are bad because a few of them are terrorists. Generalisations are bad, and you can't seem to get your head about any of that in any of your posts.

i make decisions based on evidence, i've read countless arguments that says active management isn't worth the fees. the evidence suggests that the funds that do outperform are just lucky.

the TER for a unit trust is generally about 1.6%, the dealing costs about another 1.8%. even if i got the trail commission back i would still be paying circa 3% a year. why should i pay 3% of my portfolio out each year if i get no benefit?

of course if anyone can present any real academic evidence that active management is cost effective i will look at it and reconsider my views. but so far the only argument for active management seems to be "perp high income has done well".

gadgetmind

darkpool wrote: »

so far the only argument for active management seems to be "perp high income has done well".

I'm conflicted.

The evidence comes down strongly in favour of tracking, but I do like the investment style of some of my fund/IT holdings. I suspect I'll end up with the bulk tracking but a few holdings such as Personal Assets, RIT, M&G Global Basics, etc. alongside, plus a small self-managed income portfolio and my gain-heavy tech stocks.

qpop

darkpool wrote: »

i make decisions based on evidence, i've read countless arguments that says active management isn't worth the fees. the evidence suggests that the funds that do outperform are just lucky.

the TER for a unit trust is generally about 1.6%, the dealing costs about another 1.8%. even if i got the trail commission back i would still be paying circa 3% a year. why should i pay 3% of my portfolio out each year if i get no benefit?

of course if anyone can present any real academic evidence that active management is cost effective i will look at it and reconsider my views. but so far the only argument for active management seems to be "perp high income has done well".

You misunderstand TERs. The AMC of most OEICs is 1.5% if bought on platform DIY, out of that the platform kickback is paid, and the TER is typically .25% more - the TER includes dealing costs.

I don't understand how you are so derisive about OEICs yet seem to openly support ITs - which run on a very similar premise. In fact, you recently said your first "share" purchase was Edinburgh IT - This is Woodford, and he takes large fees out of the gains.

Take a look at trustnet.com and check out the best performing managers. A large number of them outperform the indices, and a large number underperform. That's to be expected.

An index tracker will always underperform the benchmark, and that's a known entity.

Also, the majority of "articles" that you read will be based on research undertaken by Vanguard, Dimensional, etc. and therefore have serious issues with bias, given the products that they sell.

Also I think it's astounding that you think fund managers, with significant experience, access to company boards of directors, etc. are less able to pick stocks than you, an amateur is. That is arrogance at the highest level.

Lokolo

qpop wrote: »

I don't understand how you are so derisive about OEICs yet seem to openly support ITs - which run on a very similar premise. In fact, you recently said your first "share" purchase was Edinburgh IT - This is Woodford, and he takes large fees out of the gains.

As I said in my earlier post. Darkpool very much generalises. It cannot be a mixture of the 2, its one or the other.

darkpool

gadgetmind wrote: »

I'm conflicted.

The evidence comes down strongly in favour of tracking, but I do like the investment style of some of my fund/IT holdings. I suspect I'll end up with the bulk tracking but a few holdings such as Personal Assets, RIT, M&G Global Basics, etc. alongside, plus a small self-managed income portfolio and my gain-heavy tech stocks.

i think UTs have their place for exposure to a specific geograhical area etc, however for me i stick to an evidence based approach to investing. but all the best with your active managed funds.

i just find it scary how much a fairly normal middle class couple could pay in yearly fees. a couple with 500k in funds/ pension could be paying 15k a year in fees - enough for a new BMW each couple of years and a good annual holiday.

this is a money saving site, but people seem hell bent on giving away 3% of their portfolio each year.

darkpool

qpop wrote: »

You misunderstand TERs. The AMC of most OEICs is 1.5% if bought on platform DIY, out of that the platform kickback is paid, and the TER is typically .25% more - the TER includes dealing costs.

Wrong, Wrong, Wrong

the TER does not include dealing fees incurred by the fund.