Lessons in investing

Lesson 7: Can a star fund manager make a difference?

Can a handful of fund managers really know more than everyone else, and beat the market? And if they can, at what price to your portfolio returns when their fees are factored in?

Research shows that there is just a 3% probability of beating the market in the long term. Yet fund managers continue to charge a premium for a very patchy performance.

AcuityINSIGHT: The majority of fund managers do not win at investingIncreasingly, investors are becoming aware that investing costs really matter. Perhaps fewer know that the majority of active fund managers who promise to beat the market fail to deliver on that promise.

AcuityINSIGHT: All together now: ‘Costs really matter’Despite years of pressure from the likes of Vanguard, a large gap still exists between the relative costs of index funds and those of judgemental (active) managers. Using primary data, we examine those differences for all open-end UCITS funds/ETFs available to UK investors. Over time, costs make a b

AcuityINSIGHT: The unhelpful noise of short-term performanceThis issue of Insight takes a look at the temptations and challenges of short-term performance noise and looks at two high media profile performance-driven examples. Picking winners is extremely challenging.

Lessons in investing

Lesson 7: Can a star fund manager make a difference?

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