Foreign & Colonial Investment Trust

dividendhero

Call me old school, I bought FRCL at launch :money:

Thrugelmir

dividendhero wrote: »

Call me old school, I bought FRCL at launch :money:

You've aged remarkably well.........:whistle:

jimjames

dividendhero wrote: »

Call me old school, I bought FRCL at launch :money:

I didn't see your name in the Guiness Book of Records, make sure you keep your birth certificate!

masonic

Indeed, it seems dividendhero has beaten the greatest fully authenticated age of any human by at least 40 years, presuming children could not buy investments in the 1860s.

Iain_For

firestone wrote: »

May not be the case for the likes of seasoned investors on here but there could be people who see the past performance of passive investing and think that is a strategy that can only continue

As the strategy of a tracker is to track an index, it’s hard to see how they would differ in future from what they’ve done in the past!

firestone

Iain_For wrote: »

As the strategy of a tracker is to track an index, it’s hard to see how they would differ in future from what they’ve done in the past!

Get where your coming from but a lot of people have probably bought Global trackers over the last decade so by and large will have seen positive results and think that is the norm so some will get a surprise when in the future they don't do what they did in the past

bowlhead99

masonic wrote: »

True, and the other danger is that the outperformance is the result of taking on additional risk.

You often see fans of trackers adamant that when they outperform active funds it's because trackers are simplest, cheapest and best; and when they underperform active funds it's only because the active funds took on more risk and got away with it. Conveniently defining anything that doesn't follow the cap-weighted index, as being "riskier" than the cap weighted index.

Really of course there is more to 'risk' than how different you are to what an index comprises. Risk in that sense is merely 'the risk of not getting the same result as the index'. Many people are quite happy to decide they don't mind holding things in a different proportion to the index and that, for example, holding less Apple than the index holds (as F&C do) is not a particularly wild and dangerously risky thing to do.

In some cases that might be appropriate, in others not.

It's probably appropriate when F&C invest in what they invest in, as none of their investors should actually be under any illusion that they are buying the ungeared FTSE All-World index- just because it is used as a comparator in a factsheet.

Obviously you're right that people should know what they're getting into as the return might differ by tens of percent in any short or long-term period; but there's plenty of old reports to dig out and see how their holdings have compared to indices and imagine how it might have been worse than it was.

kidmugsy

Investment trusts can have good and bad spells. We used to hold Alliance Trust and Second Alliance Trust in an era they were run, as far as I could judge, in a wise, penny-pinching way by traditionalists in Dundee, far from high-cost London. They did well for us. Their savings scheme was also excellent in those days.

They merged eventually. I suppose the old boys (and girls?) retired. The merged outfit seems to have had some disappointing years lately. Perhaps F&C will have a bad spell too. Stuff happens.

masonic

bowlhead99 wrote: »

You often see fans of trackers adamant that when they outperform active funds it's because trackers are simplest, cheapest and best; and when they underperform active funds it's only because the active funds took on more risk and got away with it. Conveniently defining anything that doesn't follow the cap-weighted index, as being "riskier" than the cap weighted index.

Really of course there is more to 'risk' than how different you are to what an index comprises. Risk in that sense is merely 'the risk of not getting the same result as the index'. Many people are quite happy to decide they don't mind holding things in a different proportion to the index and that, for example, holding less Apple than the index holds (as F&C do) is not a particularly wild and dangerously risky thing to do.

I think funds can carry additional risk that isn't just 'the risk of not getting the same result as the index'. For example, they may hold concentrated, high conviction portfolios, or be heavily weighted to a particular sector, or include a higher weighting to smaller companies. Of course there are cases where the composition of the index might not be ideal.

I hold a number of trusts that are a lot more volatile than the corresponding index tracker, but I understand that, whereas others might just see the performance has been much better over the last 5 years and look no further.

Reaper

MPN wrote: »

FRCL whilst well diversified over a number of regions/sectors and holding over 500 companies with its active management does the performance really merit the fees compared to a good all world index tracker?

I'm a fan of long term investments with Investment Trusts, and have held FRCL for a long time. However beware of direct comparisons with a tracker and make sure you are aware how they work.

For example FRCL is geared 8-10% which tends to amplify gains and losses compared to a tracker.