British shares increase 77 times in value

Glen_Clark · 6 June 2012 at 12:15PM

kevin52 wrote: »

Acccording to Sunday's Independent, investment funds increased in value by 35,984% in the last 60 years, with income re-invested. The next best investment class was property with an 8,505% increase.

http://www.guardian.co.uk/money/2011/nov/04/investment-funds-hidden-fees_ wrote:

How performance figures are rigged

The track record of poorly performing funds is routinely swept under the carpet by the asset management industry, according to TCF's David Norman. Fund managers regularly close or merge poorly performing funds, which results in average performance figures which "massively overstate" the real performance of the industry.
Between 1999 and 2009 there were 2,400 fund closures or mergers, a huge number compared with the 2,500 funds open to retail investors. Usually the funds closed are the poorly performing ones, and once removed from their sector, the sector average performance figures improve. Norman cites the example of Henderson, which acquired New Star, where a significant number of funds had poor performance and were subsequently closed.
"There will be lots of investors wondering why their portfolios do not do as well as the league tables suggest. Anyone looking at five-year average performance should be aware that they might only be looking at half the story – the good half!" he wrote in an analysis for industry magazine Money Management.

Lokolo · 6 June 2012 at 12:26PM

Glen_Clark wrote: »

Norman cites the example of Henderson, which acquired New Star, where a significant number of funds had poor performance and were subsequently closed.

Big big assumption.

If a Fund Manager A has a UK Equity fund and they acquire Fund Manager B who also has a UK Equity Fund, why wouldn't they close one? I think duplication is more of a reason to close the funds.