Thread: Fund managers

A fund manager is not normally an individual, and generally "manages funds", as in an investment fund, not individual portfolios.
Individuals or companies can invest in that fund, but generally have no say in the allocation/investment decisions.

A broker/adviser/personal banker etc., is a different story.

Is it an institutional fund/super plan you are talking about?

Boy I am way off today. I meant an institution financial adviser.

The fund manager must invest funds in accordance with its PDS so have little scope to mave funds into other areas. I think you may be referring to a Financial Advisor and if so I share you pain.

I first started putting money into a private super fund 12 years ago on the advice of a financial adviser - it was a falling market and I questioned why invest in a falling market - lost 5% in the first week and then lost and lost until the market turned in 2003 with the invasion of Iraq. My advisor basically said that you cannot predict the market and cannot pick the rises and falls - I agree on daily ups and downs but when there is a low term falling market that was different.

Along came the GFC and again the losses started - I again questioned my advisor why he had not recommended a move to a safe haven like cash - in another 6 months I ignored my advisor and moved much into cash to help protect my position. When the turnaround came in 2009 my advisor was then advocating staying conservative and staying in cash - I then sacked him and have been manageing the funds myself - I had been as successful as the advisor until last year, when I made 50% - however the downside is this last 15% drop caught me out so have lost a bit.

My simple experience is that a record high of some sort is always followed by a drop so switch to a safe haven and buy back in for a profit - if you get greedy you will get caught out - a fund unit in the hand is worth two in the making.

The big question is - if our economy had been so great during the GFC etc - and so much better than the US - how come the US market has exceeded its high of late 2007 - that is recovered all losses from the GFC but the Aust market has only achieved 2/3 of its late 2007 high and has not performed as well as other markets.

The other thing I have experienced is that economic factors no longer drive the Aussie stock market - we have learned that if there is a bad message somewhere the market will sell even though there is little or no economic impact.

I think that superannuation needs to be de-linked from the stock market and other suitable investment classes used. I am not sure what but the stock market is not working for super.

Garry

I share your pain. My super is through the stock market vie a large fund as I need an income stream from it. The only other way is property but who has that much super. I sit here watching my now meager funds loose another 6 thousand last two weeks. I may have to drag myself off the sick bed and find work, but at 67! Like you I feel that super should be protected somehow. Jim

Originally Posted by garrycol

...
The big question is - if our economy had been so great during the GFC etc - and so much better than the US - how come the US market has exceeded its high of late 2007 - that is recovered all losses from the GFC but the Aust market has only achieved 2/3 of its late 2007 high and has not performed as well as other markets.

..

Mainly, because the Aus market was over valued.
The high aus$ has got a lot to do with it, many plp like myself invested in hard hit foreign markets with the view that we can pick up on the currency trade as well as the investment.
The stable Aus property Market has also kept local investment capital tied up, not many racing out to sell investment properties and buy shares ATM, being stable also means that plp aren’t borrowing on their new found equity to buy into managed funds like they were during/after 2006/07 property run, many did and this.
Also many plp were hurt by margin loans post ’08, that level of risk taking will not return for some time.

As for "Financial Advisors" (sorry have to use quotes, it's not really accurate description of what they are). They are nothing more than sales agents, for the Fund Management Company, or insurance. They receive vast sums from you portfolio no mater how it performs and it isn't mentioned in any statement (except the small print when you handed it over). Fund managers them selves are even worse. The amount of cream stripped from the fund before the unit price is calculated is mind-blowing. Some have said the former only exists to keep the angry clients away from the later.

I just finished reading this from Saturdays Age. Certainly gives you confidence in the Banks financial advisors - not.

Targets, bonuses, trips - inside the CBA boiler room

What prompted this thread was that around 6 months ago I received documentation listing my share holdings and how they had performed over the last few years. Imagine my surprise to see one company had NEVER returned a positive result since my super had been set up. I immediately checked all the rest and found that some others showed a negligible return. Also my super was split over 18 different areas. I rang my adviser and organized a meeting. I told him I wanted my portfolio restructured getting rid of these bad choices and dropping the spread to eight companies and to set about 20% in cash. I thought all this was his job and I am paying him to take my instructions. All this was probably my fault for not taking a more proactive approach and leaving this up to him. Jim

Diversification people, the old eggs in one basket story - it's important.

So is keeping an eye on your super, whether it's fund managed or self managed.
You can always change the investment choices, or the super provider.
There are a lot of sub-standard fund performances out there, that haven't made the recovery they should have, over the last 12-18 months.

Don't put it all in shares/share funds unless you're young and/or can accept some losses along the way.
Mortgage & property funds are a little more stable now, and will provide a regular dividend/income, if with the right manager.
Cash/bonds/CMA's are generally always a safe option, (but not a high performing one)

You want a mix of asset classes and investment types, otherwise you're too exposed.

Risk v Reward - The greater the risk, the greater potential for returns, but also the greater potential for loss.

There's no accountability of advisers & fund managers for poor performance, they still get their commissions & management fees.

It's YOUR money, not theirs - keep an eye on it, and make it work for you, not vice versa.