Here we go again......

bigfreddiel

half of UK retail funds may have been misleading the public and breaching the regulators principles that firms must behave with integrity and information must be clear fair and not misleading.

not only that but the scale of this practice amounts to an enormous con by the UK investment industry on an unsuspecting public

people are mislead into buying something which turns out to be just an illusion. This has been fuelled by the lack of transparency within the UK investment industry

now this isn't necessarily my view but that of Gina Miller of SCM Private

its because it seems that actively managed funds are in reality just trackers also known as close trackers with fees as high as 4%

apparently the sale of closet trackers could be bigger than the PPI misselling fiasco

so there we have it - be very careful when investing in funds

cheers

fj

Lokolo

bigfreddiel wrote: »

its because it seems that SOME actively managed funds are in reality just trackers also known as close trackers with fees as high as 4%

bigfreddiel wrote: »

people are mislead into buying something which turns out to be just an illusion. This has been fuelled by the lack of transparency within the UK investment industry

Lack of transparency, yet you have just quoted a fee %!

Get a grip freddiel. If you don't start being useful in this forum I will report your threads for timewasting.

Perelandra

If anyone's interested, I'm guessing this is the article you're referring to:

http://www.scmprivate.com/content/file/researchreports/closet-indexation-report-sept-13-full.pdf

I haven't read the article, though, so can't comment on it.

sabretoothtigger

What happened to caveat emptor. Dont pay 4% its often a waste, stick to the stakeholder pensions if you are clueless that is a very simple option and its 1% max

atush

Freddie, just invest in cash or gold and go away now lol.

grizzly1911

Perelandra wrote: »

If anyone's interested, I'm guessing this is the article you're referring to:

http://www.scmprivate.com/content/file/researchreports/closet-indexation-report-sept-13-full.pdf

I haven't read the article, though, so can't comment on it.

Interesting if simplistic read.

Publishing a full holding list, of each fund, on line quarterly might be of interest to a few. Unless it shows what proportion are being actively managed I can't see how the majority of people would be much wiser. A health warning in the KIID in mga bold 24 font might just stop some people investing.

doughnutmachine

bigfreddiel wrote: »

its because it seems that actively managed funds are in reality just trackers also known as close trackers with fees as high as 4%

I think the 4% figure came from the fact that only a small part of most actively managed funds are actually actively managed. This means that with a typical AMC of 1.5% investors are paying 4% for the actively managed part of their investments.

talexuser

I thought the 4% might include spread or initial charge but there are less of these nowadays generally and would only be one offs. 4% a year would be an outrageous charge for the whole fund.

At the end of the day if the funds are geared to income they will include some good dividend large companies so a proportion of FTSE100s is not exactly amazing or much of a story. And even those shares would have to be changed occasionally without sticking to the FTSE formula.

What you are paying for is the hope of outperformance, and the managers' perception of the cycle and prospects to dump those that have reached their peak and may lag for the next period. If you are not getting outperformance compared to a cheap tracker it was a bad call and time for a change, preferably through a discount broker.

sabretoothtigger

One manager I follow tracked none of the market, he sold short the entire thing and put the cash into the currency which rose. Which worked out in 2008.
So he was running a fund which owned nothing of what it set out to own except cash, regardless of results that is reckless to many

Most managers follow their own benchmark as set in the prospectus, its the same in any job that people do enough to qualify as working but they do not take big risks like above.
Losing just as much as everyone else is safe, taking a risk and being wrong means you lose the job. Thats not a conspiracy its human nature

chewmylegoff

sabretoothtigger wrote: »

One manager I follow tracked none of the market, he sold short the entire thing and put the cash into the currency which rose. Which worked out in 2008.
So he was running a fund which owned nothing of what it set out to own except cash, regardless of results that is reckless to many

Most managers follow their own benchmark as set in the prospectus, its the same in any job that people do enough to qualify as working but they do not take big risks like above.
Losing just as much as everyone else is safe, taking a risk and being wrong means you lose the job. Thats not a conspiracy its human nature

Well presumably the strategy taken was consistent with the objectives of the fund (which was presumably an absolute return fund) and the fund's prospectus allowed the fund manager to be short to the extent that he was? Just because it was short doesn't mean that it didn't have exposure to the sectors it set out to have exposure to regardless of whether it "owned" those assets or not. If you don't want fund managers taking those sorts of risks with your money then invest in funds which aren't allowed to short or limit total short positions to, say 20% of the NAV.