Just one fund manager in 100 beats the market

This Daily Telegraph article quotes from the director of the Pensions Institute, David Blake, who says “Based on the findings, just 1pc of fund managers are 'stars’ who are able to generate superior performance in excess of operating and trading costs.  But they extract all of this for themselves via fees, leaving nothing for investors.  A typical investor would be 1.4pc a year better off by switching to a low-cost passive UK equity tracker.”

These conclusions are consistent with decades of academic research in the field of finance and are consistent with the philosophy we apply when helping clients make good decisions with their investment capital. 

In summary, there is no need to take the risk of concentrated security positions nor gamble with attempts to time an optimum entry or exit point with shares, bonds or currency.  Neither is there any benefit in paying a fund manager to take these risks for you.  Over time, the market will reward those who take measured market risk appropriate to their individual objectives and circumstances, then diversify by region, asset class and security numbers to mitigate all unnecessary risks.  Easier said than done, but then that’s where we can help…