Really good point. I guess after the initial scan and flagging...

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El Jefe

6,066 Posts.

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28/06/18

01:28

Post #: 33996027
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Originally posted by cutty ↑

Question to the people...

I have noticed that most newly established 'boutique' funds managers are using existing and long established funds that pre-date their appointment. That is, put simply, the fund has been in existence for sometimes over 10 years, yet the new "boutique" manager (with a completely different strategy) has only had the reigns for a year or two... or less.

When using performance comparison sites it gives the false impression the fund (and its investment strategy) has been in place for a very long time, when in fact the fund (in reality) is in its infancy. I would like to think this is more of a problem with the comparison sites, like Morningstar, than the fund manager creating the false impression of having a long history and performance record. However, the cynic in me is thinking that this is a deliberate ploy to avoid the public's hesitation to invest in a fund with no history.

Maybe I am completely wrong... I have just found it increasingly difficult to compare products when you think something has a strong performance record for over 5-10 years, only to find out in reality it has only been in existence for 6 months.

Question is... do you think its fair to maintain the funds original inception date when a new manager with a completely different investment strategy takes over? I would think it would be a lot fairer (transparent) to re-set the date. This way investors wouldn't be blind to the fact when comparing products and better still not have to look for the tiny wording with a * on the funds performance charts.

Rant over...

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Really good point.
I guess after the initial scan and flagging some funds
The next step of DD would be to check the controlling managers of the fund and whether they have been present during the whole time period that they give that performance guidance figure. It’s not something I have thought of before. I agree though that it doesn’t seem ethical and should be mandatory disclosure requirement in the PDS.

Last edited by El Jefe: 28/06/18
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