What's your portfolio?

Alexland

Beddie said:

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

The problem is that there will always be an active fund that has done well over the short term as a 'best of the bunch' but that's not a reliable indicator of how it will will perform over the long term. The strategy could have just been well placed and riding a popular investment theme at the time. The more years you measure over the less chance an actively managed fund has a chance to outperform.

Hoenir

Alexland said:

Beddie said:

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

The problem is that there will always be an active fund that has done well over the short term as a 'best of the bunch' but that's not a reliable indicator of how it will will perform over the long term. The strategy could have just been well placed and riding a popular investment theme at the time. The more years you measure over the less chance an actively managed fund has a chance to outperform.

Baillie Gifford's team did likewise thanks to the genuis of James Anderson. He duly retired. BG became average. 

ChilliBob

Beddie said:

ChilliBob said:

Best fund of the bunch? RL Global Equity Select - 50% return so far. Sadly the whole team have left the fund pretty recently, so the future is uncertain to say the least!

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

 Citywire massive in the house  

ChilliBob

Alexland said:

Beddie said:

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

The problem is that there will always be an active fund that has done well over the short term as a 'best of the bunch' but that's not a reliable indicator of how it will will perform over the long term. The strategy could have just been well placed and riding a popular investment theme at the time. The more years you measure over the less chance an actively managed fund has a chance to outperform.

Yep, you just need to look at the spiva reports eh?

I think with a lot of investors, even who know this well, there's still this small part of them which enjoys the speculation of active funds - a fun portfolio if you will, as Romin and others referr to it as.

Although I must say, I did let this fund get the better of me in that regard, I hold quite a bit more than 'fun money' in it now! 

ChilliBob

Hoenir said:

Alexland said:

Beddie said:

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

The problem is that there will always be an active fund that has done well over the short term as a 'best of the bunch' but that's not a reliable indicator of how it will will perform over the long term. The strategy could have just been well placed and riding a popular investment theme at the time. The more years you measure over the less chance an actively managed fund has a chance to outperform.

Baillie Gifford's team did likewise thanks to the genuis of James Anderson. He duly retired. BG became average. 

That was a great lesson for me. Right at the start of my investing journey, against a global index fund I had several, what can only be described as punts, on many BG or BG like funds. Most are still negative, some greatly so. Enough money at the time to make me stop and think, but not enough to derail any plans. I read somewhere else that failure/lessons like this early on can be useful! 

aroominyork

Hoenir said:

Alexland said:

Beddie said:

I use that fund too and heard about the team leaving. I'll have a look at their new offering when it surfaces and probably move funds to there. It's one of the reasons many people don't like active funds - you do need to keep an eye on them!

The problem is that there will always be an active fund that has done well over the short term as a 'best of the bunch' but that's not a reliable indicator of how it will will perform over the long term. The strategy could have just been well placed and riding a popular investment theme at the time. The more years you measure over the less chance an actively managed fund has a chance to outperform.

Baillie Gifford's team did likewise thanks to the genuis of James Anderson. He duly retired. BG became average. 

That's too fair to JA and unfair to his colleagues. It's only two years since he retired and SMT lost about 40% of its value during his last six months at the helm. 

PS I've just read that he came out of retirement last year. I always wonder, when men come out of retirement, whether it's their decision or their wife's.

Alexland

aroominyork said:

That's too fair to JA and unfair to his colleagues. It's only two years since he retired and SMT lost about 40% of its value during his last six months at the helm. 

I don't think the rise and fall of BG/SMT had much to do with any of the team. They just picked the disruptive tech theme that by chance happened to become very popular so they could make out they were gods for being so fortunate.

Other managers backed different themes or factors and were less lucky. Like how the value focused managers were star performers in 2022 after a decade of being complete losers. They were even getting credit for foreseeing the impact of the Ukraine war.

I did point out back in 2021 before SMT dropped that any fund that had grown 100% in one year was highly likely to underperform over the next few years.
https://forums.moneysavingexpert.com/discussion/comment/78251439/#Comment_78251439

SMT is like what happened with bonds, which I and others warned about in 2021 as barge pole territory.
https://forums.moneysavingexpert.com/discussion/comment/78787785/#Comment_78787785
https://forums.moneysavingexpert.com/discussion/comment/78787986/#Comment_78787986

Basically any asset (from thematic growth shares to boring fixed income) becomes high risk to the point where you should expect lower future returns when it gets too expensive. That's probably where we are now with AI powered shares, as we were with Internet shares 25 years ago.

When investors hype up asset prices they usually get lots wrong.

aroominyork

I don't disagree. My point was that the change in BG's performance was not down to Anderson leaving. It was, as you say (though I did not explicitly say), thematic. 

Cus

If you are DIY then it makes sense to play safe and go with the index. To have any chance of beating that you need to be full time reviewing all funds, people movements etc etc, not easy.

InvesterJones

Cus said:

If you are DIY then it makes sense to play safe and go with the index. To have any chance of beating that you need to be full time reviewing all funds, people movements etc etc, not easy.

And be better at it than the professionals doing the same