Managed Funds What should I expect from active management?

Discussion in 'Shares & Funds' started by Skinman, 29th Feb, 2020.

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  1. Skinman

    Skinman Well-Known Member

    Joined:
    9th Jan, 2018
    Posts:
    587
    Location:
    Perth
    Hi All,

    I tipped a significant amount into a managed fund (invested globally but in the UK as I bought out of a defined benefit scheme there) through an advisor who is based in UK and AUS back in Oct.

    I had been tracking the performance of the overall investment against some vanguard products and until last week it had been so far so good. The fees they charge appeared justified as the net return was outperforming the vanguard products.

    Last week happened (I always knew there would be period of loss along the way) and I was expecting a call / some kind of contact to discuss the situation and potential options such as increasing bond, fixed interest or cash holding until things settled and then buying back in or advising me strategy is long term hold and we advise sticking in there and riding it out etc. (I had assumed this is what I was paying them for...active management...particularly in a situation like last weeks).

    When I finally called them on Thursday (maybe I should have been more proactive) they told me the investment committee had been meeting all week and there would be a letter in the post I should receive next week explaining why they aren’t recommending any changes to the portfolio. I didn’t think this was very “active” or proactive at all.

    I know there are heaps of you on here who are very experienced, have tried passive v active, been through the previous corrections, tried to pick the top and bottom etc etc. so just want to hear your opinions on my first experience of a downturn and if my expectations of my advisor (0.8% per annum) are unrealistic?

    I’m not in a situation to take advantage of the down turn as I don’t have excess cash to buy in, as I mentioned it was a lump sum investment back in Oct 19.

    Thanks in advance to anyone who takes the time to reply.
     
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    6,035
    Location:
    Australia
    Is it simply your significant amount isnt that significant to the investment manager?

    active management can mean active management within a share portfolio, they have the ability to buy and sell without your specific agreement, face to face discussions, or any number of things.

    what was agreed initially?
     
    Skinman likes this.
  3. Skinman

    Skinman Well-Known Member

    Joined:
    9th Jan, 2018
    Posts:
    587
    Location:
    Perth
    Thanks for replying.

    It’s a large international company so maybe it’s not that significant in the grand scheme of things. However I don’t think it’s specific to me.

    It’s invested in a pre defined (reviewed every 6 month) portfolio of 12 funds. I expected an event like last week was that sort of event that would trigger a proactive / speedy review.

    A lot of docs were signed / agreed at the start and any rebalances of the portfolio need to be agreed by myself.

    However what was discussed in terms of what Ievel of advice / active management I get for my 0.8% was clearly interpreted differently by myself against what has happened this week. Hence my question to other. Are my expectation too high?