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Thursday, 27 January 2022
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We often assign quality in investment choice by historical returns, backed up when we see fund flows directed towards such historically well-performing funds. This is a mistake made by investors and regulators.
Investing in a traditional index can be compared with taking the main road to a destination, but if you know the backroads and traffic conditions, you coud reach your goal quicker.
Notwithstanding the wide variety of fund managers and fund structures vying for the investor dollar, some questions need to be asked of all of them. They help us determine the quality of the fund and the manager.
Financial advisers spend an inordinate amount of time selecting fund managers for their clients, but is the impact/effort matrix worth it. It's hard enough for good managers to even beat the index.
Family offices and institutional asset allocators select their fund managers based on different factors, and it influences the quality and outcomes of their decisions.
The funds management industry is undergoing consolidation and evolving rapidly, under pressure to provide better service and high returns while cutting costs. Chris Cuffe discusses the present and the future.
Paying a high performance fee must be a good problem to have, as it must mean the fund manager has delivered outstanding performance, right? It's not always the case, and it pays to know how the fee is calculated.
Last week’s article on index versus active portfolio management drew many comments, including on the website, by email and by forwarding other articles to us. Here is a sample.
If you think you can identify the few managers who can outperform the index over time, either by research or based on advice, go for it. But the odds are stacked against you.
The efficient market hypothesis is 90% true, and you will lose money by ignoring it. However, judging by Warren Buffett’s fortunes, a few skilled searchers might find rewards in the remaining 10% worth chasing.
Greg Perry and Peter Morgan surprised many people in funds management this week with comments attributed to them in the AFR. Here's what Greg said in an interview in 2002.
If you’re not prepared to select a manager and hang in there for at least three years and preferably five, index and save yourself some fees. You should expect underperformance at some time in the investment cycle.
Eligibility for the Commonwealth Seniors Health Card has no asset test and a relatively high income test. It's worth checking eligibility and the benefits of qualifying to save on the cost of medications.
This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.
The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.
Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.
Markets don't seem normal, but Magellan is criticised for its caution. Higher interest rates to control inflation could create a recession and some of today's investing will turn out a mass delusion of modern history.
Are markets on a road to recovery or a path of potholes? Leading portfolio managers were asked for the theme that most excites or worries them in the year ahead, and what they will especially watch for.