A recent article in the Financial Times by Chris Newlands highlighted some interesting trends amongst the behaviour of professionals that work within and promote the advantages of active fund management.
Swindells Financial Planning has always shied away from the crystal ball gazing and the hunch betting antics of actively managed funds; preferring instead to adopt a properly diversified, low cost, passive fund management strategy that is based upon the finest academic investment research.
Mr Newlands’ article cites a recent survey by Ignites of 1,001 staff, many of whom promote the use of active funds to the retail (you and me) investor. The survey results showed that of this sample:
- Two thirds have a sizeable amount of their personal savings in passive funds.
- Including 45% who say they are “significantly” invested via this strategy.
- Whilst only 20% say they avoid passive funds altogether.
Mr Newlands goes on to say that these findings should not be a surprise given that 75% of active fund managers never actually beat the market they aim to outperform!
David Norman, a former Credit Suisse Asset Management executive, commented that the active fund management industry is being exposed as “one huge sales and marketing machine with little evidence of any value creation”.
Swindells Financial Planning believes that these findings are yet another example in an ever expanding list extolling the use of a properly researched, properly allocated and diversified, low cost, passive investment strategy over the cynical marketing and claims of the active investment fund industry.
To read further information on how we invest and why please see our investment policy statement here.
Please do not hesitate to contact us via our Seaford or Uckfield, Sussex offices if you would like to talk to us further or by using the consultation form on this page.
