| If you take the fact that the bulk of investment | | | | asset manger that has the following: |
| managers cannot get into double figures on a | | | | Low fees based on performance |
| compound growth basis over five years and very | | | | Wouldn't you rather know that if your investment |
| few can out perform the stock index, then it is | | | | manager is not making money for you he is not |
| obvious you have to be careful with your fund | | | | making money for himself? |
| selection. | | | | Of course, this does not guarantee performance, |
| This article is all about getting better pensions | | | | but at least they have confidence in their ability |
| performance and will help you separate out the | | | | and this can give better long term returns. |
| winning funds and asset managers from the losing | | | | Funds under management promoted are |
| ones. | | | | representative |
| Have you ever seen a fund advertised by a | | | | As we have seen one of the tricks of the major |
| major asset manager that losses? | | | | companies is merge funds, drop funds and launch |
| We have never seen one, yet the bulk of funds | | | | new funds, so that they always have a attractive |
| don't do well, so what's going on? Let's find out. | | | | product for the sales force. |
| Selective track records | | | | Many asset managers though, will give you a |
| The pensions and mutual funds industry is sales | | | | performance that is representative of ALL funds |
| driven so when a fund does not perform it is | | | | under management and this gives true |
| conveniently merged into another fund or not | | | | representation of their management skills. |
| promoted. Furthermore, many companies simply | | | | The fact is, there are a lot of hungry small |
| start off funds with small amounts of money and | | | | managers out there, it's just a question of doing |
| then pick the best one to promote. | | | | some research. |
| It's all selective and many investors simply don't | | | | Past performance is no guarantee of future |
| question the figures and believe the sales patter | | | | results |
| of the advisor or the glossy brochure and then | | | | Or maybe it is. |
| wonder why they end up disappointed! | | | | You know the big mutual funds will not do well! |
| The best you can expect. | | | | A bit flippant, but you can see what we mean if |
| If the bulk of funds cannot beat the share | | | | you look at 5 year holding periods and |
| indexes the best thing for share investors to do is | | | | performance figures for the major asset |
| to simply buy index tracking funds. | | | | managers as a group. |
| With their low fees they are the best bet, but if | | | | If you are looking to invest in mutual funds then |
| you think about it, double digit performance | | | | tracking the index looks the best bet. |
| figures are about all you can hope for over a 5 | | | | Most asset managers don't out perform it |
| year period. | | | | anyway and you get lower fees on tracking |
| When you take into account inflation this is hardly | | | | funds. |
| great growth. | | | | Final words |
| Alternatives to target 30% annual growth or | | | | You can also diversify and look for higher gains |
| more | | | | look for the smaller innovative managers. |
| You can however make bigger returns by seeking | | | | They don't tend to have huge sales budgets and |
| out managers that are innovative and rely on | | | | rely on performance and are prepared to |
| performance based fees. | | | | demonstrate they have confidence by earning |
| There are many managers who do this. | | | | fees in this way. |
| They may deal in alternative investments such as | | | | Seek them out their there and you may be glad |
| futures, FOREX or commodities or simply shares | | | | you did. |
| and equities. The aim though is to seek out an | | | | |