World Cup Fever...As Fund Managers Look East
11 July, 2017
To great fanfare and excitement the World Cup kicks off, as grown men paid more than the GDP of Tuvalu kick an inflated pig skin around some grass in Russia. Hooray. Some considered ratings from our resident pundit in this week’s photo. Send us your World Cup questions for more expert musings and drawings!
Which fund managers do you like?
Meanwhile, we’ve been asking you what you think about your investments – what you like and what you value?
When it comes to fund managers, many of you are fans of Lindsell Train and talk about the stellar performance. Terry Smith’s Fundsmith Equity fund also gets rave reviews, and although you rightly say it’s not the cheapest, it’s a general thumbs-up on performance, hence value. Low-cost ‘passive’ house Vanguard also gets lots of positive reviews for simplicity and low charges. We recently asked independent research house Square Mile for a short list of its top fund picks and share these with you on our updated Intrepid Investor pages (https://emailboringmoney.co.uk/t/4QZH-NK9-EEOLT-9DUN-1/c.aspx), also packed with both an ISA MOT and Pension MOT which are worth a quick read to make sure you’re not missing any tricks.
Your number one bugbear? Those who cite performance figures but don’t do so after fees. In fact many of you are fed up more generally with the continued lack of disclosure about costs and want a consistent and prominent way of these being displayed. The second pet hate is the lengthy documents received in the mail which include reams of ‘BS’. Robin Angus, who runs the Personal Assets Trust, is called out for a “no BS” regular update which is beautifully brief! “Fits on an A3 page – hooray!”
Die Großßen Poohbahs
I shared lots of your feedback to a conference full of asset managers in Berlin this week as part of an update about what customers have to say and want. It does annoy me that year after year lip service is paid to making things better for customers, before the majority of the big kahunas (with some notable exceptions) slip back with relief into the ‘grown up’ economic discussions about quantitative easing and the outlook for bond prices. Ignoring who pays their fees in the first place and how they make a retail experience more than just a ‘dumbed down’ institutional one.
During the conference, there was a consistent focus on the East and China – and the growth stories are indeed compelling. China has the second largest GDP in the world and is the second biggest global stock market by market capitalisation (ie what all the shares are worth when totted up). But it is about number 70 in the ranks when you look at GDP per person, hence the emerging markets tag. Here’s a little challenge. What % of your investments are held in the UK? And if you look at the % allocation of your investments by country – how does that map to the respective global stock market weightings? Most of us will have a home bias, but with the collection of jokers in charge these days, is this an active decision based on a bullish outlook for the UK, or just sticking to your comfort zone and familiar brands? Worth a thought.
It certainly reminded me to have Emerging Markets as a decent slug of a long-term portfolio. I’ve held JP Morgan’s Emerging Market Investment Trust for ages (nearly 12% of this is with the Chinese powerhouses Tencent and Alibaba) and also have a smidge in BlackRock’s Frontier Investment Trust – but that is not for the faint hearted! Do your research and make sure this sort of investment is for a 7 year + period (in my opinion). Because the only certainty is that these investments will be volatile and will have years with a lot of red on the chart!