Apparently, Australia risks being left behind in the race to attract overseas investors due to the twin evils of regulation and taxation according to this piece in the AFR. Whether it is or it isn’t I don’t really care. However the article did have the following staggering claim.
“We have world-class fund managers thanks to the super system, competitive fees and bipartisan political agreement that we should leverage to manage overseas capital,” said Blake Briggs, the FSC’s chief executive. “And obviously the Australian economy would benefit from the CCIVs, but we’ve moved at a glacial pace.”
This really is a tell us you know nothing about the local funds management business without telling you know nothing about the local funds management business. A quick glance at SPIVA’s annual scorecard of local active funds offers the following telling graphic.
Over the long term over 80% of all fund managers fail to beat the S&P/ASX200 index.
I could be charitable and say that by world class he meant just as bad as fund managers in other jurisdictions because when you look at their data it is practically identical to the performance of our local fund managers.
Would certainly agree without qualification. The industry is overpaid and not attuned to the individuals goals and aspirations. They use the same formula to push clients into set allocations to bring everyone back to tors. They are lazy and just want to cling to Indexes and as you point out 80% fail at that.
Much easier to set and forget and let you ride out the draw downs.
It is a pity we are taught very little of financial management as the individual is biased to act in their interests. More education required. Of course the FIN comes out with this rubbish to justify second rate performance as there is a symbiotic relationship between the two groups. Where do you find active managers who work for you? Stop losses work. You can always re-enter the stock.
To mangle the Churchill quote – never in the field of human endevour has so much been paid by so many for so little…..
My view has always been if you are a strict passive long term investor chart an index ETF using the closing price and a moving average. Buy when it is above the MA – sell when it is below and you will outperform every fund manager in Australia and have control over your own financial destiny.