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I've read a lot recently about fund managers and do they justify their fees, etc but it's obviously all down to performance and if they perform then nobody can really complain about paying fees that are agreed upon when you sign up with them. How do you determine which fund manager to use? Is it through being swayed by their marketing and presence in financial media or listening to what friends and colleagues have invested in and have had success with?

I'm looking at a 3 way investment portfolio - first part with my own share picks which are not doing too badly at present, secondly I've invested a large amount in the Indi and now I'm looking at something like A Gray, Coronation, etc. Went into AG yesterday in the CT Waterfront and very impressed with their presentation, etc but just interested in other peoples choice of fund manager, how did you choose them, are you happy with your choice and what sort of returns have you had and did they live up to their promises?

I agree with Orca.

Using fund managers you always start below 100 with the factor of their fees. If they charge 2.5%, you start at 97.2% of their benchmark.  It is easy to find out their top shareholding be it whatever type of fund.  Look at the best performers and choose your direct investments from the shares that the best performing fund managers hold in their portfolios.  At least you save their fees.

Some fund managers go so far as to also charge a fee for every transaction they make in your portfolio! Just think about the conflict of interest they have to manage - and who do you think normally comes out as the winner?

Very few fund managers consistently manage to even only equal the index, so at best they generate returns for you below what you can do yourself.

Quote from: Alsie on November 29, 2013, 07:06:48 am

I agree with Orca.

Using fund managers you always start below 100 with the factor of their fees. If they charge 2.5%, you start at 97.2% of their benchmark.  It is easy to find out their top shareholding be it whatever type of fund.  Look at the best performers and choose your direct investments from the shares that the best performing fund managers hold in their portfolios.  At least you save their fees.

Some fund managers go so far as to also charge a fee for every transaction they make in your portfolio! Just think about the conflict of interest they have to manage - and who do you think normally comes out as the winner?

Very few fund managers consistently manage to even only equal the index, so at best they generate returns for you below what you can do yourself.

Also many U/T only pay out once a year in terms of dividends and purchase of more units - with these index funds they normally pay out quarterly, you have to reinvest the funds though. I myself are reviewing all my U/T's (other than Coronation T20) with a view to switching the funds into the Indi and maybe the Divi

I'm with GCR here, also looking to my UT to index funds, but I don't want to attract extra tax so I'll wait out the 3 year period.

Have a look here http://www.etfsa.co.za/ETF_factsheet.htm perhaps theres something you might like. Dbx world could be something to get some offshore exposure.