The now not-so-new ETFs that follow well-known indices have been a hugely welcome introduction. One does not have to debate the inexplicable underperformance of the majority of active managers, the sometimes usurious fees, the change in teams, and other influences that take up time and effort. The pressure is to explain what they really mean…
Why make it so hard? Occasionally, maybe even frequently, we come across investment strategies that are unexplored or even unknown. Naturally, the first port of call is a search engine to see what we can learn. Regrettably the outcome is rarely enlightening. Most have a promo picture and vapid words, a list of the team…
Themes and long-term investing go hand in hand with wide divergence between the merits of ETFs and active funds. A recent plethora of appealingly named ETFs hit on the current hot topics. These quantitatively screened funds can only go so far providing appropriate exposures relying on current data rather than what might evolve. They also…
With the astonishing skew to “what is working well,” reading monthly fund reports one would expect equally astonishing alpha. Clearly, that is not the case, and investors are largely left with cursory comments on the less-than-useful positions in the portfolio. At least in listed markets the attribution can be verified, assuming the fund is forthcoming…
The huge movement in commodity prices in the past year cannot have escaped any investor’s attention. Should there be new allocations to commodities and resource stocks on the basis we are in a prolonged period of price rises? Over the past 150 years there have been only four major commodity cycles that have lasted for…
One of the boxes ticked when selecting a fund manager is whether the investment team has its own money in the strategy, or even better, has ownership in the organisation. The logic is self-evident: ‘skin in the game’ should matter. Yet there are, inevitably, drawbacks. The fund’s risk /return appetite may be unduly influenced by…
The ETF world has multiplied well beyond expectations. Index-linked ETFs are now a standard-bearer for investment portfolios driven by sticky active fund fees and variable performance. Yet their use versus desired outcome point to ease in choice, rather than a more considered approach. Additionally, advisers are often taking a stab at a regional index to compensate…
Conversations on investment matters are wide-ranging. Many enjoy the ethereal world of big picture debates. Identifying these in the long run has been critical, but only a handful matter. Interest rates are the perennial, though rarely has the consensus been right. Over much of the past decade the expectation has been that rates will inevitably…
One of the (many) headaches of the current financial market setup is the lack of return on cash or term deposits that can hold onto the real value of money. This is a modest but important ask. Many investors want an unreasonably large liquidity pool that will have no risk of capital loss well beyond…
Advisers all have financial benefit from promoting investments through an advice fee, or percentage of FUM. This is not a value judgement, simply a statement of how this industry and many others work. No one has come up with an alternative model that can balance all the conflicting requirements. Yet, as we know, there will…
