Fisher Investments UK - opinions?

masonic

I think the managed equity fund that captures market upside while skilfully navigating market downturns is a myth. If anyone knows of such a beast I should very much like to know about it

The solution to the problem of derisking involves holding assets other than equities. This can be achieved through a multi-asset fund of which there are many passive and a few low cost active options available, or you can hold your own mix of bonds, cash, etc.

UncleK

masonic said:

The solution to the problem of derisking involves holding assets other than equities. This can be achieved through a multi-asset fund of which there are many passive and a few low cost active options available, or you can hold your own mix of bonds, cash, etc.

Exactly - Vanguard (of course - but plenty of others) do funds that are 100% bonds, and also various mixes of shares and bonds - "LifeStrategy" Vanguard call them. (Honestly, I'm not a salesman for them!)
Classic example for those investing a pension - as you get closer to retirement, you might want to switch into a less riskier split if that is going to be your only source of income.

Eyeful

1. I think that active managed funds that skilfully navigating market downturns is a myth spread by the fund managers themselves. If there was any independent research that shows it to exist, you can be sure that these active fund managers would be shouting about it in their adverts,

2. If the DIY investor finds a low cost 100% global index tracker Fund or ETF too adventurous for them. 
There are low cost Multi-Asset Funds that will give them a ready made portfolio with a share/bond split to match the their risk level. 
So again they do not need a high charging active fund manager to do it for them.  

3. When the DIY investor gets towards 5 years or so of retirement they can look into "Sequence of Risk" to find out what changes (if any) they might want to consider.
So again they do not need a high charging active fund manager. 

4. May be of interest to the OP:
https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds
https://www.ii.co.uk/ii-accounts/sipp/sipp-investment-ideas/target-retirement-funds

Cus

Eyeful said:

Silverpete said:

Unfortunately you miss the point. Simple tracker funds are not that simple or tracker. It's easy to play against them if you are a small investor. Anyhoo I hold no torch for Fisher or any other wealth manager, but no all are bad for investors. Might I ask those who are so pro these tracker funds if they use them themselves? I'm not talking about short term weighted ones either.

1. Yes, I  use  a passive low cost FTSE- All World ETF and have done for quite some time.

2. You say it is easy to play against them if you are a small investor.
Then please name the active wealth manager (who over lets say just 20 years) after charges/ fees are taken into account  consistently matches or outperforms the FTSE-All World index.

Do you have, from independent research, a list that shows the active wealth managers that have been operating for 20+ years, who benchmarked their fund to the FTSE-All World Index, with their performances and fees please?  I can't find it sorry

masonic

Cus said:

Eyeful said:

Silverpete said:

Unfortunately you miss the point. Simple tracker funds are not that simple or tracker. It's easy to play against them if you are a small investor. Anyhoo I hold no torch for Fisher or any other wealth manager, but no all are bad for investors. Might I ask those who are so pro these tracker funds if they use them themselves? I'm not talking about short term weighted ones either.

1. Yes, I  use  a passive low cost FTSE- All World ETF and have done for quite some time.

2. You say it is easy to play against them if you are a small investor.
Then please name the active wealth manager (who over lets say just 20 years) after charges/ fees are taken into account  consistently matches or outperforms the FTSE-All World index.

Do you have, from independent research, a list that shows the active wealth managers that have been operating for 20+ years, who benchmarked their fund to the FTSE-All World Index, with their performances and fees please?  I can't find it sorry

A fair challenge. Around 20 years ago I was just starting out on my journey and I can only recall a couple of options in this space, and my recollection was they were not intended to be held in isolation. The industry as a whole was geared around selecting multiple holdings to balance a portfolio. Global index funds were not a thing back then - you had to buy each region separately. Emerging markets would probably not have featured in the limited global active fund options. The trend of offering one-stop-shop funds is relatively recent. And to be clear this isn't the effect of survivorship bias, there genuinely weren't the types of fund available to invest in that we take for granted today, and certainly not the low costs. I can remember paying a 1% AMC for a S&P500 index tracker. Nowadays 0.1% is on the expensive side. But of course custody fees were covered by trail commission.

Cus

I typed into Google:

"Mutual funds that have beat the S&P 500 over 20 years"

as i suppose the S&P 500 is not far of the FTSE-All World Index and AI told me that these funds did.

Fidelity Contrafund (FCNTX):

Invesco QQQ Trust (QQQ):

Vanguard Wellington Fund (VWENX):

Fidelity Growth Company Fund (FDGRX):

It also told me that:

"Most active funds underperform: Over 20 years, it is extremely difficult for an actively managed fund to beat the S&P 500 after fees. As of late 2022, a report noted that fewer than 10% of active U.S. stock funds beat their benchmarks over the preceding 20-year period."


So you've got a less than 10% chance of doing better by choosing active in this region, which seems reasonable.  

masonic

Cus said:

I typed into Google:

"Mutual funds that have beat the S&P 500 over 20 years"

as i suppose the S&P 500 is not far of the FTSE-All World Index and AI told me that these funds did.

Fidelity Contrafund (FCNTX):

Invesco QQQ Trust (QQQ):

Vanguard Wellington Fund (VWENX):

Fidelity Growth Company Fund (FDGRX):

It also told me that:

"Most active funds underperform: Over 20 years, it is extremely difficult for an actively managed fund to beat the S&P 500 after fees. As of late 2022, a report noted that fewer than 10% of active U.S. stock funds beat their benchmarks over the preceding 20-year period."

QQQ itself is an index tracker. It tracks the NASDAQ, so no surprises that it beats the S&P500. I've not looked into the others, but perhaps they too have opted to focus within this narrower pool that has tended to outperform. This is of course not without its risks. QQQ itself fell 80% in the dotcom crash vs 50% for the S&P500. It is not a fund for the investor who is in search of risk management.

Cus

One could argue that a passive s&p index tracker fund, that has 30% of its investment in 5 companies, is equally risky.  I wonder what the limit is for a lot of these funds managers with their remits.  If I went to some active fund manager and they said that they are going to put 30% of my money in 5 companies I'd be put off.

masonic

Cus said:

One could argue that a passive s&p index tracker fund, that has 30% of its investment in 5 companies, is equally risky.  I wonder what the limit is for a lot of these funds managers with their remits.  If I went to some active fund manager and they said that they are going to put 30% of my money in 5 companies I'd be put off.

I agree with this sentiment. Concentration certainly puts me off too. But concentration within an index waxes and wanes over the years. I'm yet to be convinced that any less concentrated US fund is less risky. I was heartened to see Premier Milton US Opportunities, which eschewed the mag 7, but didn't that go off the rails! Thankfully without me.

My approach has been to reduce my exposure to the region. I doubt that will save me, but perhaps it will save me from the worst. No fund manager has that luxury, because being wrong for a few years is fatal.

I have also taken a small-cap value tilt, but I don't think that in any way addresses the risk aspect. I take the view that the downside will probably be fairly indiscriminate, although even more concentrated funds like QQQ will be hit a lot harder. Though in my view, the time to come up with a new plan is after the carnage, when valuations have been levelled. Prior to that, my strategy has been to focus on gradually reducing risk and preserving the benefits I can now potentially enjoy from a period dominated by bull markets.

Eyeful

Cus said:

Eyeful said:

Silverpete said:

Unfortunately you miss the point. Simple tracker funds are not that simple or tracker. It's easy to play against them if you are a small investor. Anyhoo I hold no torch for Fisher or any other wealth manager, but no all are bad for investors. Might I ask those who are so pro these tracker funds if they use them themselves? I'm not talking about short term weighted ones either.

1. Yes, I  use  a passive low cost FTSE- All World ETF and have done for quite some time.

2. You say it is easy to play against them if you are a small investor.
Then please name the active wealth manager (who over lets say just 20 years) after charges/ fees are taken into account  consistently matches or outperforms the FTSE-All World index.

Do you have, from independent research, a list that shows the active wealth managers that have been operating for 20+ years, who benchmarked their fund to the FTSE-All World Index, with their performances and fees please?  I can't find it sorry

No I do not have a list. I ask this or something similar, when someone implies it is easy to consistently outperform a major global index.

Such indexes have no fees/charges to contend with.

For arguments sake, lets give a wealth manager the credit of being able to matching such an index over 20 years. The high fund fees/charges that are paid to the manager, means that after charges, their investors must  never get close to matching the index.