Fund managers

Thrugelmir

darkpool wrote: »

100 years ago people used to think smoking was healthy as it cleaned the lungs. it did take a good couple of generations and a lot of academic research before people accepted smoking was actually bad for you.

Don't underestimate the power of lobbying by vested interests.

Much gets suppressed.

darkpool

Thrugelmir wrote: »

Don't underestimate the power of lobbying by vested interests.

Much gets suppressed.

yeah it is telling that the people on this thread on the side of active management work in the City or as financial advisers.

Lokolo

darkpool wrote: »

yeah it is telling that the people on this thread on the side of active management work in the City or as financial advisers.

Because the companies in the city don't run index trackers or anything.....

Such an idiot.

I would also like to see where I have said people should always buy active management funds.

darkpool

Lokolo wrote: »

Because the companies in the city don't run index trackers or anything.....

Such an idiot.

I would also like to see where I have said people should always buy active management funds.

but trackers pay the fund manager a fraction of what an actively managed fund pays.

idiot? i think the idiots are the people paying 3% a year for no discernible benefit.

Lokolo

darkpool wrote: »

but trackers pay the fund manager a fraction of what an actively managed fund pays.

idiot? i think the idiots are the people paying 3% a year for no discernible benefit.

One of my funds, over a 5 year period has beaten its index by 26% after fees.

Now if I was like you, I would say "Oh people should only invest in active management because they beat the index".

The fact is, each have their own advantages and disadvantages.

I like my active management fund because it goes for high risk. A tracker wouldn't have different weightings, its just an index, which is why I chose the active fund for that part of my portfolio.

HOWEVER, I like index trackers for my FTSE 100 fund because I don't see an active fund manager beating them and can save on costs.

What you keep saying, is that no-one should ever buy active management because they have higher fees. Which is WRONG. Sometimes, paying those extra fees is worthwhile because it goes with your investment aims.

You need to learn that some investments have better needs in some places than others. There is no one size fits all investment which you seem to think there is from reading one book.

darkpool

Lokolo wrote: »

One of my funds, over a 5 year period has beaten its index by 26% after fees.

What you keep saying, is that no-one should ever buy active management because they have higher fees. Which is WRONG. Sometimes, paying those extra fees is worthwhile because it goes with your investment aims.

i keep saying that the fees involved in active management are not justified by the returns received. i would pay the high fees if the fund managers gave me a better return than trackers.

once again someone is pointing to an individual fund to justify the entire UT industry. some people pick the right numbers for the lottery, maybe they have a unique skill - or maybe it is luck?

gadgetmind

Lokolo wrote: »

One of my funds, over a 5 year period has beaten its index by 26% after fees.

And the others? And all the others held by people who didn't stick a pin into one of the minority of active funds that beat their indexes?

Lokolo

darkpool wrote: »

i keep saying that the fees involved in active management are not justified by the returns received. i would pay the high fees if the fund managers gave me a better return than trackers.

once again someone is pointing to an individual fund to justify the entire UT industry. some people pick the right numbers for the lottery, maybe they have a unique skill - or maybe it is luck?

At what point did I say that because of my fund we should all invest in active management? I haven't. I have said that THAT particular fund is worthwhile for ME because of MY investment strategy.

To rule out ALL active management funds because of costs that all active management funds charge is pathetic and thats exactly what you are doing! I have even said in the next paragraph that I would pick a tracker if I wanted to invest in FTSE 100!!!!!!

gadgetmind wrote: »

And the others? And all the others held by people who didn't stick a pin into one of the minority of active funds that beat their indexes?

Why would I care about what other people choose? What they choose is up to them. But to rule out every single type of an investment because not all of them beat another is pathetic and very much a generalisation.

Ark_Welder

andybenw wrote: »

I currently have around 12000 cash to invest and will be adding around 2000 per month for the next couple of years.

How many different shares to pick.

Would 6 at 2000 each be the best way to go, adding a new share each month till I get to 20 or so.

Or would it be best to diversify immediately say 24 shares at 500 each. I assume the dealing costs would be making this inefficient.

Have a read of Iron Wolf's posts on the following thread: https://forums.moneysavingexpert.com/discussion/3599197

That is what you should be doing to pick your shares. If you don't have the time or inclination to do that then stick to funds because doing anything else is just guesswork.

If anyone suggests a share to hold - even if they say that they hold it (or even ones they do not hold) - ask them why. If they are able to provide answers to the points raised by Iron Wolf then their answer might be worth considering.

Linton

gadgetmind wrote: »

And the others? And all the others held by people who didn't stick a pin into one of the minority of active funds that beat their indexes?

You dont chose funds by sticking pins in a list of 2000+ funds - you should start by chosing the sector. If you chose a focussed high growth sector the evidence seems to show that you get better performance with a managed fund than a tracker which by definition has to invest in all shares in the index.

So look at the UK Small companies sector on trustnet. 45 out of 47 funds beat the FTSE UK small cap index over 5 years.

See US Small Companies. The index seems to be the Russell 2000 which showed a 6.1% growth over 5 years. The worst managed fund showed a 31% growth over 5 years.

And then you ignore the fact that many interesting areas dont have trackers and dont have a meaningful index either, Global Technology is an example. Is it wrong to invest in them?

The problem by the blanket statements that x% of managed funds do worse than the index seems to totally ignore what the funds invest in which makes the statistic somewhat meaningless. To take another example - ethical funds. These tend to do rather worse than unrestricted funds. Does the fact that they do worse than trackers prove that trackers are better? No - the people who invest in ethical funds seem happy to forego return in return for avoiding things they consider unsuitable. Similarly Cautious funds - they give worse performance but in return provide far less fluctuation.

It seems that the people who advocate banning investment in managed funds are more interested in reducing payment to city investment managers than in maximising their own return. Fair enough if that's what you want, but......