This Thread discusses the future of fund management.
Everyone on this site, almost by definition, does it for themselves. Is this what more private investors must also do?
The abysmal returns of stock markets over the last 12 months (FT 100 –32%) and indeed 10 years (?) have exposed the shockingly inadequate performance of our pension funds and the fund management industry.
There must be a seller to match every buyer so stock market investment is a “zero-sum game”. The law of averages means that half the participants must under perform the market; knock of the high fees, which gnaw away relentlessly at the asset base, and relative outperformance can only be achieved by far fewer. As the very best fund managers advise the super rich then the chance for the ordinary investor, in a standard fund, to beat the market are way under 50%.
The world has changed, the amount of information available to the investor today is vast and growing. Sites like Stockopedia, giving up-to-the-minute price information, investment research and comment, provide the private individual with access to nearly as much data as the average fund manager. Low-cost trading platforms, ETFs and Trackers are other relatively new innovations that have helped level the playing field for the private investor.
There has been a barrage of criticism of both fund managers’ performance and fees in the last 6 months. Is this just an inevitable consequence of market meltdown or must fund managers change their game and if so how? Can private investors realistically do better? What more help do they need to do so?
Asset allocation is such an important component of performance for private, indeed all investors, that I have therefore started a second thread to provide a platform to discuss ongoing asset allocation. “What Asset Allocation Today?”
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Hugoc
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