Investors betrayed by fund managers
20 August 2009
Fund managers are failing to add any value to pension funds, leaving investors better off selecting index tracker funds, a survey has found.
According to data from campaigning consumer website www.howmuchdoineedtoretire.co.uk, 86 per cent of pension fund managers are ‘getting away with’ charging investors for a consistent bad performance.
The research looked at every mainstream pension fund available to private/personal investors in the UK, then filtered the funds down by excluding any fund below £10 million and/or any fund that did not have at least a five year track record – leaving a total of 778 funds.
Matthew Morris, a director at the consumer website, says, ‘When a pension investor hands their hard earned money to a fund manager to get them a return they must have an expectation that the manager will produce something more than they could achieve by doing the investing themselves, otherwise why bother? One may as well throw some darts at the dartboard and pick investments on that basis.’
Morris suggests that investors would undoubtedly be better following a strategy of not using funds and argues they would be better served throwing their money at randomly selected assets or, more viably, at ‘index trackers of one sort or another’.
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