DIY Investor Magazine
/
December 2015
11
I think the best summary of what to look out for
when it comes to picking an active fund manager
comes courtesy of one of the best, John Chatfield-
Roberts at Jupiter.
He thinks a good fund manager should:
• have the necessary skills built into them.
There isn’t an exam you can take to make you
a good fund manager;
• be inquisitive, hard working and ultra-competitive;
• have the ability to think independently and
focus on what’s relevant rather than becoming
bogged down with irrelevancies;
• have the humility to admit and rectify mistakes.
After all, it can often take ruthless action to sell
those severely loss making stocks that are
hurting the portfolio;
• stick to a proven investment process even
when it is not currently working in their favour;
• be sufficiently experienced, having been
exposed to several market cycles; and
• be in tune with the psychology of the market”.
This is an excellent checklist of attributes that
I think any investor researching a fund should
focus on.
IF YOU DO DECIDE TO GO FOR AN ACTIVE
FUND MANAGER – WHAT TO LOOK OUT FOR
But timing is everything and you need to wait for
other investors to capitulate and sell everything.
So, how do these ideas translate into building
portfolio of ETFs? Sticking with the theme of lists
I’d keep to these golden rules.
•
Make sure you are properly diversified with exposure
to lots of interesting alternative ideas within both the
equities and fixed income space.
Be willing to embrace more contrarian ideas.
•
Stick with dividend orientated smart beta style
trackers which capture the growth over time
in dividends
•
Never pay more than 1% for any tracker fund, ever.
