Time to put your savings on the fast track.
Tuesday 1 June 2010
High charges and poor performance of many traditional funds are proving a turn-off for investors, with more than two-thirds of active fund managers failing to beat the index over ten years.
James Salmon of the Daily Mail discusses the benefit of index funds.
Even legendary investor Warren Buffet -- whose stockpicking skills have made him one of the richest men in the world -- is a big fan of passive funds.
Nic Round, from fee-based independent financial adviser Murray Round, says: 'Most of our customers are invested predominantly in passive funds. However, most UK investors still don't realise they are getting a raw deal in active funds. This is because fund managers want to sell active funds to make more money and advisers don't get commission by selling passive investments.'
Passive funds can be split into two basic groups -- trackers and Exchange-Traded Funds. ETFs are shares -- they can be bought and sold more easily and track verything from well-known markets to the future pricing of Pork Bellies.
Unlike active funds, passive ones are guaranteed to underperform the index because of charges. The question is by how much.
Mr Round says a medium-risk investor with a £50,000 lump sum should put £15,000 in Vanguard FTSE UK Equity Index; £10,000 in iShares MSCI World Index ; £10,000 in iShares index-linked gilts; and £15,000 in Vanguard Government Bond Index. For those investing [pounds sterling £200 a month, he recommends they put it all in Legal & General UK Equity Index Fund.
posted by Murray Round Wealth Management @ 11:14,
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.
Welcome to our Blog
Our Blog focuses on the three Ts...truth, transparency and trust. The world of investment management is fraught with self interested parties keen to sell investment products but wrapped up as 'advice'. Only with totally transparency, can investors make informed and successful decisions. We have included various categories for simpler navigation, alternatively search our Blog using key words you think are relevant. We hope you find something of interest to you.
Contact Us
We welcome your enquiry to us. Simply click on Contact Us' link at the top of the page. You may also email us at service@murrayround.co.uk or telephone 01743 248108.
Visit us again!
