Are your funds in the relegation zone?
Tuesday, 26 June 2007
Results shock for former top performers. By Stephen Ellis of The Telegraph on June 23 2007. Full story here
"Thousands of investors have a total of more than £8bn invested in funds that were top of their sectors three years ago but which have since slipped into the relegation zone.
Falling funds: unit-holders 'should act more like owners and less like fans"
This article uses the football analogy by saying “If a football team stops scoring goals and winning games they fall down the table and will eventually be relegated automatically. In finance the responsibility is your own.”
Whilst investors can compare various fund manager and be pleased if they choose a fund at the top of the league or jump ship by selling out of a poor performing fund, it is important to understand why a fund performs or fails to perform.
The football analogy continues. All these teams (fund managers) jockeying for position are actually all members of the "The Championship League". They are not in "The Premier League".
The question is whether you, as an investor, want your investment managed by fund managers in The Premier League or The Championship?
I accept an investor will find it difficult to know the difference, but start with one point. Most actively managed funds in the UK fail to beat the market. Consistent performance by attempting to capture market returns therefore puts you in The Premier League.
Start by reading the evidence and then make good investment decisions. After all, even if you are middle of the table of The Premier League, its way better then top of The Championship. Happy investing..
Categories: Active Fund Management, Index
posted by Murray Round Wealth Management @ 20:52,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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