Why so many funds?

darkpool

psychic_teabag wrote: »

I'd have thought that the supermarket is specifically trying to persuade you to buy the product from them, there and then. I don't suppose Tesco give free samples in order to persuade you to buy that product from Asda next week.

I don't see why any one IFA would have any reason to promote "the IFA profession" (ie some other IFA).

when i was at the beach last week some bird was giving away cans of red bull. she wasn't selling, just trying to get brand awareness.

perhaps there might be an association of IFAs......

psychic_teabag

darkpool wrote: »

when i was at the beach last week some bird was giving away cans of red bull. she wasn't selling, just trying to get brand awareness.

Perhaps she works for Red Bull. They obviously profit no matter where you buy it from. Less likely that she's working for Tesco, since they don't profit if you buy your Red Bull from Asda.

I still don't follow why you think any one IFA benefits by pushing "the IFA profession" / "brand" ?

dunstonh

but i think the IFAs are here to drum up business for the IFA profession.

Broken record....

IFAs are largely a cottage industry made up of small local firms. The odds of someone reading a post here and then happen to call into the same local firm belonging to an IFA posting here are tiny. I dont think any IFA cares what another IFA firm earns and has no reason to drum up business for them.

If the advice IFAs gave was particularly good it wouldn't bother me. But it does seem that IFA suggest to customers to buy the highest costing products.

That is your opinion and it is wrong as you continue to mix up provider/product, fund and adviser costs time and again.

If the IFAs here admitted that active managed funds didn't deliver any alpha returns I wouldn't bother posting, but we've seen an IFA here that seemed to think funds delivering negative alpha returns was good. we've also seen the house IFA give the names of a few well performing (lucky) funds as "evidence" that active management works.

You are clearly factually wrong. So, you wouldnt expect an adviser to agree with you. Whenever you are given examples of a managed fund offering value you just respond by saying that one doesnt count and it should be ignored.

when i was at the beach last week some bird was giving away cans of red bull. she wasn't selling, just trying to get brand awareness.

perhaps there might be an association of IFAs......

Red Bull were not giving any brand awareness to the retailers you can buy red bull from. So, your analogy is flawed.

Now you are getting into tin foil hat territory. What other conspiracies do you think there are? Was it IFAs that faked the moon landing? Did an IFA shoot JFK?

darkpool

psychic_teabag wrote: »

Perhaps she works for Red Bull. They obviously profit no matter where you buy it from. Less likely that she's working for Tesco, since they don't profit if you buy your Red Bull from Asda.

I still don't follow why you think any one IFA benefits by pushing "the IFA profession" / "brand" ?

but when you get free food samples from the supermarket it's normally the food manufacturer that finances it.

good point, my argument would be a lot stronger if there was some sort of trade body for IFAs.....

http://www.aifa.net/

darkpool

dunstonh wrote: »

Whenever you are given examples of a managed fund offering value you just respond by saying that one doesnt count and it should be ignored.

Here's a pic of a lottery winner, do you accept this as evidence that playing the lottery is a worthwhile investment?




i don't know why i'm bothering to post this, as you already know that active fund management does not work. that's why i object to you posting, you know active fund management does not deliver alpha returns but you don't admit to it.

"In fact, his analysis indicated that higher bond mutual fund expenses were a dollar for dollar “deadweight loss.” The higher the expenses, the lower the net return was for the individual investor. Professor Reichenstein’s analysis also concluded that the performance of similar bond funds with and without front-end loads was not statistically distinguishable. Additional expenses and loads just tended to result in a dollar-for-dollar reduction in investor’s assets."

http://www.theskilledinvestor.com/ss.item.5/is-it-worth-paying-higher-bond-mutual-fund-management-fees.html

browniej

darkpool wrote: »

we've seen an IFA here that seemed to think funds delivering negative alpha returns was good.

I'm trying to do my own research to start off a stock and shares ISA next tax year. Looked on Trustnet and saw alpha and beta but totally confused.

Should I only look at positive alphas then? Would a negative alpha always be less than its benchmark so avoid?

darkpool

browniej wrote: »

I'm trying to do my own research to start off a stock and shares ISA next tax year. Looked on Trustnet and saw alpha and beta but totally confused.

Should I only look at positive alphas then? Would a negative alpha always be less than its benchmark so avoid?

alpha return is the outperformance that a fund manager delivers by good investment decisions.

beta return is the performance due to the general market moving.

the vast bulk of research says that fund managers do not justify the fees they charge. have you considered a tracker fund?

dunstonh

"In fact, his analysis indicated that higher bond mutual fund expenses were a dollar for dollar “deadweight loss.” The higher the expenses, the lower the net return was for the individual investor. Professor Reichenstein’s analysis also concluded that the performance of similar bond funds with and without front-end loads was not statistically distinguishable. Additional expenses and loads just tended to result in a dollar-for-dollar reduction in investor’s assets."

American market where taxation hits managed funds harder than the UK where taxation does not apply.

Here's a pic of a lottery winner, do you accept this as evidence that playing the lottery is a worthwhile investment?

Comparing something with 14 million to 1 chance of winning with something where its far easier to pick suitable options is not acceptable as an argument.

darkpool

dunstonh wrote: »

American market where taxation hits managed funds harder than the UK where taxation does not apply.


Comparing something with 14 million to 1 chance of winning with something where its far easier to pick suitable options is not acceptable as an argument.

you mean in the UK we have stamp duty and the yanks do not? i just provided some strong academic evidence that managed funds do not work, do you have any academic evidence that says active management is worth the fees?

if you admitted that active fund management is not cost effective i would stop posting here......

dunstonh

you mean in the UK we have stamp duty and the yanks do not? i just provided some strong academic evidence that managed funds do not work, do you have any academic evidence that says active management is worth the fees?

US market research is not suitable for UK. There are some principles that apply to both and some good opinions. However, it dose not explain the areas there no trackers exist or where you want an investment strategy with no tracker in existence to match that or more focused/niche markets or immature markets.

if you admitted that active fund management is not cost effective i would stop posting here......

That is almost worth posting a lie to get that to happen.