Fund managers on point
STEPHEN CRANSTON: How to really measure the performance of fund managers
Many fund managers can’t tell the difference between a long-term approach and stubbornness
We’ve all seen fund houses manipulate their performance data. It is not a reliable guide to future returns. But, equally, I don’t buy the argument that investment is all about luck. It’s true that many fund managers who look like masters of the universe fall on their faces when the market moves from a growth to a value phase and back — but that is often because they can’t tell the difference between a long-term approach and stubbornness. So the investment performance surveys do provide some useful information, including insight into which managers are performing best in current conditions.The Alexander Forbes Manager Watch, the oldest surviving survey, also cherry picks a few of the group’s multimanager funds. It is always useful to look at the spread of returns. In the domestic-only balanced funds, returns varied from 11.95% for Pan African, which surely merits at least an interview, down to 2.45% for Stanlib and 3.75% for Foord Domestic.
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