Broomer's Blog

From the category archives: Funds

Funds

When It’s That Time of the Month Again

I have the pleasure of sitting next to Charles Hovenden, who has an excellent record of running absolute return products. Charles is a delightful colleague, engaging, thoughtful and entertaining in equal measure. However, towards the end of each month he becomes more withdrawn, anxious and well let's say just a bit crotchety.

2018 was not a good one for absolute return strategies and for many active managers in general, as markets became increasingly driven by momentum. This is not unusual in a mature bull market but nevertheless it makes it no less difficult to come to terms with. Clients rarely recognise such subtleties, elevating pressures as reporting periods approach and little wonder that portfolio manager tension builds towards the end of the month.

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5 Key Things to Remember When Analysing a Fund

1. Commonly applied past performance screens are totally useless. Managers are rarely as bad as you think they are when they underperform, nor are they as good as you might think when things are going well.

2. You are looking for a manager who can invest money wisely, not necessarily ones that present well. Don't confuse these two skills.

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