Anyone been to an IFA and not been advised to buy Unit Trusts?

Lokolo

gadgetmind wrote: »

Trackers don't feel, they just track, and sector averages of OEIC performances are similarly dispassionate.

Of course, everyone thinks they are above average, and that they'll be able to pick the fund that won't promptly return to mean. Some people do but most don't.

Yes but we aren't most, hence why we both have Rathbone Global Opps

psychic_teabag

gadgetmind wrote: »

On UK shares, yes stamp duty is unavoidable unless you use more complex instruments that equity holdings. The Vanguard UK tracker charges you this 0.5% explicitly rather than hiding it in tracking error, which is nice.

I've been pondering that... they charge a full 0.5% for purchases, but presumably at any time there will be people both buying and selling the fund, and I assume they only incur stamp duty on the net inflow of money / purchase of shares. So they're charging for the worst possible case. [I'm not quite sure what a better / fairer solution would be, since they have to cover the costs.]

gadgetmind

Lokolo wrote: »

Surpsingly, trackers do trade so have these costs as well!

Their turnover is typically much lower than an active fund, but yes, you will see these trading costs as tracker error, which they both quote and set a target for.

TBH, I don't care whether people invest in trackers or active funds, but I do care about how cost/error/performance data is presented to the punter.

Lokolo

gadgetmind wrote: »

Their turnover is typically much lower than an active fund, but yes, you will see these trading costs as tracker error, which they both quote and set a target for.

TBH, I don't care whether people invest in trackers or active funds, but I do care about how cost/error/performance data is presented to the punter.

Yep, it would be nice to see the costs in such detail for all funds, but I can't see it happening.

qpop

gadgetmind wrote: »

Trackers don't feel, they just track, and sector averages of OEIC performances are similarly dispassionate.

Of course, everyone thinks they are above average, and that they'll be able to pick the fund that won't promptly return to mean. Some people do but most don't.

The thing is, ask somebody whether they'd like:

a) to consistently underperform the average by a small margin

or

b) have an opportunity to outperform (whilst also potential to underperform)

Many will choose b, and that is where active investment management is compelling.

You are also missing the point of the thread here, it was started by someone who claimed a basket of blue chip shares would perform better than the OEIC portfolio for a small investor.

darkpool obviously thinks he can beat the market, but that fund managers with their fees of UP TO 3%!!!!!!!!! are unable to.

(Also it is worth noting that "physical" trackers find themselves on the wrong side of the bid/offer spread when buying shares, as all the trackers tend to buy the same shares at the same time, pushing the buying price up for everybody. They won't tell you that though )

Lokolo

qpop wrote: »

darkpool obviously thinks he can beat the market, but that fund managers with their fees of UP TO 3%!!!!!!!!! are unable to.

No he knows they can, but the chances of picking one that does is very small and because we chose funds based on picking out of a hat, that it's not worth it.

gadgetmind

Lokolo wrote: »

Yes but we aren't most, hence why we both have Rathbone Global Opps

Ah yes, my dirty little secret, hidden at the bottom of the sock drawer.

I've only held this one for a couple of years, so don't have copies of old reports. How were they invested at the start of 2008 just before their nearly 40% drawdown compared to the IMA Global's 24%?

I'd welcome a view on that portfolio from anyone who argues that active managers can see these things coming!

gadgetmind

qpop wrote: »

b) have an opportunity to outperform (whilst also potential to underperform)

Many will choose b, and that is where active investment management is compelling.

Fine, as long as they don't take these risks with too much of their portfolio.

darkpool obviously thinks he can beat the market, but that fund managers with their fees of UP TO 3%!!!!!!!!! are unable to.

I also hold an income portfolio of FTSE Blue Chips. With my company/sector spread, I expect to roughly track the UK high income sector regards capital value, but won't be giving away any of my (roughly) 5% of yield.

Long-term equitiy returns come from, 1) re-invested dividends, 2) not giving anyone else a larger slice of your action than you need to.

Lokolo

gadgetmind wrote: »

Ah yes, my dirty little secret, hidden at the bottom of the sock drawer.

I've only held this one for a couple of years, so don't have copies of old reports. How were they invested at the start of 2008 just before their nearly 40% drawdown compared to the IMA Global's 24%?

I'd welcome a view on that portfolio from anyone who argues that active managers can see these things coming!

Unless a fund manager suddenly gets a Dalorian that goes 88mph and hit with a gigabit of lightening, no-one will know the future. But active managers can at least limit their losses in certain areas, or gain exposure to other areas, which is what I look at when deciding my portfolio. And to me, that's why I am willing to pay these fees (although obviously it would be nicer for them to be lower and we'll see what happens post RDR).

I have also only held it since mid 2008, but I was drip feeding which helped. And now its 18% in Cash, so obviously being quite conservative!

Also not sure why you thanked my previous post (that's not like you ) as I was being sarcastic!

gadgetmind

Lokolo wrote: »

But active managers can at least limit their losses in certain areas, or gain exposure to other areas

Meanwhile, the managers of funds held by people less smart than us are doing the exact opposite as they "see value" and "consider it oversold". If you hold a few funds, your managers are busy selling to each other.

Also not sure why you thanked my previous post (that's not like you ) as I was being sarcastic!

I often thank people who disagree with me as long as they do it with style. That and by trying for sarcasm, you achieved accuracy.