Professional Finance people no better than amateurs

MrMalkin

Aegis wrote: »

The larger a fund is, the harder time it will have taking advantage of favourable pricing because...

That's a good point and it's well taken, but I don't think it's the whole deal: what's to stop a large fund splitting up it's holdings and giving multiple active managers a shot? They have the money, after all.

TH1878

MrMalkin wrote: »

That's a good point and it's well taken, but I don't think it's the whole deal: what's to stop a large fund splitting up it's holdings and giving multiple active managers a shot? They have the money, after all.

Because the multiple fund managers wouldn't have the track record to attract investors to them.

It's not the fund manager's money - it's your money.

TH1878

GeorgeHowell wrote: »

Why do most IFAs insist on contunuing to push equities when the FTSE100 is still below its its 1999 peak ? (I think we know the answer to that one) ?

I stopped reading at this. Are you familiar with 'Buy Low, Sell High'?

TH1878

JamesU wrote: »

From Trustnet: AXA Framlington UK Select Opportunities, AXA Framlington UK Growth, CF Lindsell Train UK Equity and Cazenove UK Opportunities are the only UK All Companies funds that have beaten their sector average in the each of the last five calendar years, according to the latest FE Trustnet study. The high level of volatility since 2007 has made it increasingly difficult for funds to consistently outperform; the four vehicles make up less than 2 per cent of the 256 UK All Companies with a long enough track record.

Link here:http://www.trustnet.com/News/Research.aspx?id=300732

So what? The important figure over 5 years is cumulative, not discrete.

MrMalkin

TH1878 wrote: »

Because the multiple fund managers wouldn't have the track record to attract investors to them.

Why not? A large fund could have a large amount set aside for salaries, thus attracting top proven talent, whilst still keeping expenses low as a percentage of fund size.

A quote from an (unnamed) pension sponsor from a PWC report: "With indexed funds, we don't have to go into the inefficiencies of searching, monitoring and firing of active managers." Strongly suggests that searching for active talent isn't worth the effort.

TH1878

MrMalkin wrote: »

Why not? A large fund could have a large amount set aside for salaries, thus attracting top proven talent, whilst still keeping expenses low as a percentage of fund size.

I'm talking about fund history. I wouldn't buy a fund with a short history. It doesn't matter what the manager's pedigree is because the fund remit may be different to that in which they made their name. Just look to Anthony Bolton and his China Special Situations fund.

Besides, if I buy Fund A with a particular fund manager - I wouldn't want them to just 'split' the fund and allocate a new manager. I'd move my money away.

A quote from an (unnamed) pension sponsor from a PWC report: "With indexed funds, we don't have to go into the inefficiencies of searching, monitoring and firing of active managers." Strongly suggests that searching for active talent isn't worth the effort.

Sounds like they're lazy more like.

MrMalkin

TH1878 wrote: »

Sounds like they're lazy more like.

Oh okay, glad you know better than them.

fairleads

TH1878 wrote: »

I'm talking about fund history. I wouldn't buy a fund with a short history. It doesn't matter what the manager's pedigree is because the fund remit may be different to that in which they made their name. Just look to Anthony Bolton and his China Special Situations fund.

Besides, if I buy Fund A with a particular fund manager - I wouldn't want them to just 'split' the fund and allocate a new manager. I'd move my money away.



Sounds like they're lazy more like.

Just as we wouldn't place much store on the advice of people who have little experience of investing.

JamesU

TH1878 wrote: »

So what? The important figure over 5 years is cumulative, not discrete.

The Trustnet plot in my post above does show the cumulative performance of AXA fund as representative example of performing fund, UT fund sector average and HSBC FTSE all share tracker.

If there is a better way to represent the data, just let me know how and I will try to change it, this is the best I can do. Would be nice to rationalise this as meaningfully as possible to sort myth from reality.

JamesU

brasso

Linton wrote: »

This sounds almost religious, read The Book and you will be saved. Do you have an explanation of why the real world of UK investing appears to fail to follow the sacred texts?

An unreasonable response. The book is outstanding, and interestingly, offers some very insightful answers to your exact question.

Seriously, why not read the book? It's very highly regarded, and taught me a great deal.