tactical trader

I was doing some CGT work yesterday and had to work through some old reports from the days when I was stupid enough to have discretionary fund management. Imagine my annoyance therefore to come across an article in a recent edition of Fidelity Funds Network news.

"Liontrust fund manager Jeremy Lang took home a bumper pay package last year despite the dire performance of his funds over the period"

Apparently Lang earned more than 2.5 million pounds yet his fund ranked 253rd out of 271 funds in the UK All Companies sector.

According to the article Chelsea Financial Services is the latest in a number of Financial Advisers to dump Lang from their approved list. I would urge you to do the same with any of your underperforming funds and stick to ETF's or Index Funds with minimal charges, you will certainly be no worse off and may even make a bit more.

This is supported by a recent article in Investors Chronicle by Chris Dillow, he claims that fund managers are institutionally stupid. In the three months leading up to the article publication date every single one of the 276 actively managed UK equity unit trusts surveyed by Trustnet had underperformed his own low risk portfolio. In the last year only five outperformed it and in the last five years only four have beaten it.

The point Dillow makes is that his selection was based on very basic criteria and that the supposed skill and knowledge claimed by fund managers when they want your money should mean that they beat his figures by a considerable margin.

Dillow closes by claiming that "the fund management industry is structurally incapable of doing a good job for investors"

So if you are still trusting the institutional managers the message is simple - don't.