Performance, Benchmarks, Managers, comparison etc

ChilliBob

Hey guys,
I'm familiar with companies which would provide information on fund performance, market benchmarks, manager ratings etc for alternative assets due to my former line of work, however, I'm not familiar with the options from a private investor/public markets perspective. Are there sites which would, for example:
* List the various index funds one could invest into
* Give details of the performance of these funds over time (using a consistent methodology)
* Compare these funds to their peers, again over time
* Produce some kind of league tables for managers showing performance and track record etc.

I'm sure there will be, and I'm sure some of you guys know the good ones from the junk ones. Any thoughts much appreciated. 

eskbanker

Trustnet and Morningstar both offer extensive investment analysis capabilities, freely available without subscription....

AnotherJoe

Twopoints.

1. The wrong way round.

Wouldn't you start with where you want to invest and then look at what indexes are available in that area, rather than what indexes are available?

For example, theres no meaningful comparison between tech stocks in the indian stock market, retailers in switzerland and copper producers. But thats the sort of pointless comparison you'd be making  if you just looked at all indexes, "oh look retailers in Switzerland did well last year so therefore thats a better investment than indian tech stocks or copper mining"

2. You  dont seem to understand what an index fund is. An index fund doesn't meaningfully have a manager, eg someone making active decisions to buy and sell. They just buy (or replicate with other means) the shares in the index. So you cant say the manager of the indian tech stock index is better than the manager of the copper index just because one rose more than the other. The managers are irrelevant you are just comparing the different industries (or geographies or technologies or whatever the index measures). Managers dont come into it.

csgohan4

OP you need a strategy before you look for funds,

Today's winners could be tomorrow's losers. Be careful and research and don't get sucked into headline YTD returns. Balance against your risk appetite and take it from there. 

ChilliBob

Thanks for the posts guys, I'll look at the websites you mention.
Regarding your points:
* Wouldn't you start with where you want to invest? - I guess that's a bit chicken and egg. For now I'm most likely to be looking at Global indexes, but if I pretend I wasn't then what would make me want to invest into say UK Equities over say US Equities? - There would be a number of factors, a vast number, but performance of said indexes over time would surely be something you consider? (Standard disclaimers apply past performance not a concrete indicator of future performance yadda yadda)

* I know what an index fund is from a high level, just not right down to the detail. I guess the point I'm making is there's obviously more than one Global Index fund - many managers offer these - there must be some difference between them - fees being one key area. However, there's got to be more than that otherwise surely everyone would just select based on fee basis and there'd be a monopoly!

* I didn't make it clear that I was interested in other than index funds, but that's a possibility. And that's when it's interesting to look at a manager's track record - sure if they've had two decades of top quartile funds there's no guarantee there next one wouldn't tank but it's good to know vs one who's been bottom of the pile for a while! 

This is an entirely new area for me, *I fully hold my hands up on that*, there's much more reading, research and learning required before I start to even crawl into the actual act of investing I'm not hasty! - I may well ask some silly questions though along this path, please bear with me on it, we all had to be newbies at some point!

ChilliBob

csgohan4 said:

OP you need a strategy before you look for funds,

Today's winners could be tomorrow's losers. Be careful and research and don't get sucked into headline YTD returns. Balance against your risk appetite and take it from there. 

Oh for sure I do, very much so. But as per above I do think that performance is something to consider when formulating a strategy. The strategy is likely to be pretty simple to start with until I feel comfortable and confident then it may change. 

This is jumping the gun a bit (I have more to read first) but it just popped into my head last night basically!

dunstonh

* Wouldn't you start with where you want to invest? - I guess that's a bit chicken and egg. For now I'm most likely to be looking at Global indexes, but if I pretend I wasn't then what would make me want to invest into say UK Equities over say US Equities? - There would be a number of factors, a vast number, but performance of said indexes over time would surely be something you consider? (Standard disclaimers apply past performance not a concrete indicator of future performance yadda yadda)

No. Strategy is first.  Then you select the funds that fit that strategy.    For example, there is no point researching say Index linked Gil funds if your investment strategy has no allocation to index linked gilts.

If your strategy is just to pick a global equity (inc UK) fund then you just research the funds in that area.

Trustnet and Morningstar are the main ones.  They both have free versions of their paid offerings but for the average consumer that is plenty good enough.

AnotherJoe

ChilliBob said:

Thanks for the posts guys, I'll look at the websites you mention.
Regarding your points:
* Wouldn't you start with where you want to invest? - I guess that's a bit chicken and egg.
it shouldn't be
 For now I'm most likely to be looking at Global indexes,
a good choice to start but a choice nontheless
but if I pretend I wasn't then what would make me want to invest into say UK Equities over say US Equities? -
research and what other investments you have
There would be a number of factors, a vast number, but performance of said indexes over time would surely be something you consider? (Standard disclaimers apply past performance not a concrete indicator of future performance yadda yadda)
not past performance no. But your thoughts on likely future performance of these markets  yes. 
* I know what an index fund is from a high level, just not right down to the detail. I guess the point I'm making is there's obviously more than one Global Index fund - many managers offer these - there must be some difference between them - fees being one key area. However, there's got to be more than that otherwise surely everyone would just select based on fee basis and there'd be a monopoly!
Nope. Doesn't work that way with many products including indexes. There are plenty of reasons  people won't buy the cheapest. Some valid some less valid some ignorance 
* I didn't make it clear that I was interested in other than index funds, but that's a possibility. And that's when it's interesting to look at a manager's track record - sure if they've had two decades of top quartile funds there's no guarantee there next one wouldn't tank but it's good to know vs one who's been bottom of the pile for a while! 
Yep but again you need to qualify that with the area. Someone who runs a US tech fund has had an easier time than someone who runs a Brazilian sugar cane fund. (Made up Example). You can't look at managers in isolation. 
This is an entirely new area for me, *I fully hold my hands up on that*, there's much more reading, research and learning required before I start to even crawl into the actual act of investing I'm not hasty! - I may well ask some silly questions though along this path, please bear with me on it, we all had to be newbies at some point!

Fair enough. But you don't necessarily need to do lots of "investing" research to decide that, for example healthcare or renewable energy is likely to do better than average in the future so they might be good areas to research into.   Or maybe some other area from your own personal experience at work or home. 

There's a good YouTube showing Peter Lynch talking about how the "ordinary" investor can have an edge over the professionals.

Here we go. Less than 15 minutes. https://www.youtube.com/watch?v=MLIxSL1v79g

Another_Saver

Again as above I think you're looking at this is the wrong way round. You wouldn't look at the indices available in a country then decide which country to invest in. With the major providers, Vanguard, Fidelity, iShares, HSBC, L&G etc. it is very rare to see a noticeable difference between funds tracking the same index. But within the main regions there are a few indices that are different. In the UK we have the FTSE all share (almost entire market), the 100, 250 and 350, and L&G offer a UK mid cap index fund which is the 250 excluding investment trusts but keeping real estate investment trusts. ITs make up 24% of the FTSE 250 and the management charges have added a slight drag on performance. Globally, Vanguard have funds that follow the FTSE all world, FTSE global all cap, FTSE developed world and FTSE developed world ex UK indices. iShares and Fidelity tend to use the MSCI world. But you would only look at that after deciding you wanted to invest in a global index fund. In emerging markets, the main difference is the FTSE meeting markets indices exclude Korea, MSCI emerging markets indices include Korea (last time I checked).

ChilliBob

Perhaps I'll flip this on its head then. 
Assume:
* You want to invest in a Global Index Tracker fund
* This forms part of a wider strategy and portfolio balanced to your risk appetite. 

I'd then want to know:
* Which fund to choose
* What historic returns have been over various time horizons

I suppose critically how would you decide the first bullet, obviously fees is a big part, but what else?

I get my questions on the manager are a little invalid in this situation, but it would obviously stand for active funds. 

This is still some way off as the assumptions above aren't yet met, this is still being researched  

ChilliBob

AnotherJoe said:

ChilliBob said:

Thanks for the posts guys, I'll look at the websites you mention.
Regarding your points:
* Wouldn't you start with where you want to invest? - I guess that's a bit chicken and egg.
it shouldn't be
 For now I'm most likely to be looking at Global indexes,
a good choice to start but a choice nontheless
but if I pretend I wasn't then what would make me want to invest into say UK Equities over say US Equities? -
research and what other investments you have
There would be a number of factors, a vast number, but performance of said indexes over time would surely be something you consider? (Standard disclaimers apply past performance not a concrete indicator of future performance yadda yadda)
not past performance no. But your thoughts on likely future performance of these markets  yes. 
* I know what an index fund is from a high level, just not right down to the detail. I guess the point I'm making is there's obviously more than one Global Index fund - many managers offer these - there must be some difference between them - fees being one key area. However, there's got to be more than that otherwise surely everyone would just select based on fee basis and there'd be a monopoly!
Nope. Doesn't work that way with many products including indexes. There are plenty of reasons  people won't buy the cheapest. Some valid some less valid some ignorance 
* I didn't make it clear that I was interested in other than index funds, but that's a possibility. And that's when it's interesting to look at a manager's track record - sure if they've had two decades of top quartile funds there's no guarantee there next one wouldn't tank but it's good to know vs one who's been bottom of the pile for a while! 
Yep but again you need to qualify that with the area. Someone who runs a US tech fund has had an easier time than someone who runs a Brazilian sugar cane fund. (Made up Example). You can't look at managers in isolation. 
This is an entirely new area for me, *I fully hold my hands up on that*, there's much more reading, research and learning required before I start to even crawl into the actual act of investing I'm not hasty! - I may well ask some silly questions though along this path, please bear with me on it, we all had to be newbies at some point!

Fair enough. But you don't necessarily need to do lots of "investing" research to decide that, for example healthcare or renewable energy is likely to do better than average in the future so they might be good areas to research into.   Or maybe some other area from your own personal experience at work or home. 

There's a good YouTube showing Peter Lynch talking about how the "ordinary" investor can have an edge over the professionals. 

Thanks I'll check that out for sure. Until recently I worked in tech for quite a while. I was tempted to buy Snowflake shares (was using them well before any IPO chatter) but research has put me off that idea.
Regarding the point on managers I think I'm still a bit too in a different mindset, but it would go along the lines of:
* Rank given fund against its peers, at some level, be that strategy, geography, both etc, depending on how many funds there are
* Performance of said fund is then assessed into quartiles, q1 being the best
* Summary of number of Q1 funds as proportion of total funds over x period gives some kind of ranking, you could introduce weights based on sizes of fund etc. 

But I'm veering well off track here and may be barking up the wrong tree with my thoughts