Arborbridge wrote: OhNoNotimAgain wrote:
Fair enough comment, but then we are back in the realm of various manager's pet ideas for achieving that. In my reading, over the periods of five or ten years which are easily researchable, passive funds do not do well against the active ones. I know this goes against current fashion in some circles, but when I compare the funds I'm invested in, they thankfully appear above some well known passives - I haven't seem anything yet which would make me more away from the active (or semi active!) income funds.
That's because QE boosted growth, momentum and medium/small cap stocks for the first 5 of the last 10 years. Active funds are overweight these stocks because they are viewed, wrongly, as being less well researched. Passive funds have more exposure to big caps and hardly any funds are overweight big caps.
In the 10 years to end February the FTA was up 182% while the UK All Companies was up 187% (which remember is after costs)
But over the previous 5 years the tables are reversesd with the FTA up 28% while the UK All Co was up only 22%
And over the 3 years to that date the effect is even more pronounced with the FTA up 30% and the UKA up 26% while funds with a bias to big caps beat both.
Well, I'm willing to look and learn
But whenever I have tested various charts to see what is happening, the passive funds have not shown any out performance (usually the opposite BTW) which would tempt me - and that's going back a couple of decades of my own pokes into the data. I'm willing to be proved wrong, if only because investing in a passive is an appealing idea in terms of effort and fretting - or lack of them.
No, Arb, you are not wrong, and the very poster who is arguing with you runs a passive fund with a pathetic performance, having destroyed capital vs inflation since inception, and produced mundane yield and pathetic dividend growth in the process.
We only hold ONE passive across all our portfolios, for the NASDAQ, because we have found it quite easy to beat passives in general with either individual holding baskets or baskets of ITs for the rest. Not beating them all the time of course, but measured over a suitable rolling period. Like always you have to try to choose the best and keep your eye on it, it does not always work out, so one must be prepared to occasionally change tack and accept mistakes. With passive you are just accepting mediocrity. Progress was never achieved that way in history.
This, by the way, should really be my last post, I increasingly feel that posting is a waste of time. On another thread some posters have demonstrated a lack of curiosity for something I was trying, in a hurry, to show them, yet the method I outlined quickly I have used often, is very sound, and they are making a pigs ear of theirs, being anal rather than analytical. There are errors and misunderstood methods all over these boards, but few listeners imho. So I will concentrate while I can health-wise on the investing online newsletter I produce occasionally for a few dozen family and friends, all of whom have no trouble with their methodology, maths, portfolios, unitising,and generally results. They can be sharp in their replies, but are invariably helpful and correct. They share my curiosity for progress, but are not trying to just score points.
One of my brothers posted on TMF for a while, he did mention you once or twice, and was driven away by the same aspects he tells me.