Venture: Asset Management
Issue 75;
In a recent issue of ByteTree Global Trends, the asset managers jumped off the page, especially in the UK. Having been in the doldrums for years, they have turned the corner in a group move.
When I joined the city in 1998, the asset managers were the cream of the crop. They had both market exposure (beta), plus excess returns as they beat the market (alpha). As a fund holder you enjoyed those returns but paid high fees for them, but as a shareholder you received those fees as well as the excess market return. These were some of the most highly rated stocks of their day.
Then came index funds (passive), which were followed by the boom in ETFs. Fees were slashed, and over the past decade, an era of big is beautiful, the passive funds beat the active funds. That can only happen when the biggest stocks are in the lead because no active manager is overweight the biggest stocks. In contrast, they tend to prefer mid-caps. If you believe the turn has come, and active managers, at least those that are left, are back in charge, then the market has seemingly forgotten what incredible businesses these are.
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General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments. There is no guarantee dividends will be paid. Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.
Funds - Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.
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Investment Director: Charlie Morris. Editors or contributors may have an interest in recommendations. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of ByteTree Group Ltd. ByteTree Asset Management (FRN 933150) is an Appointed Representative of Strata Global Ltd (FRN 563834), which is regulated by the Financial Conduct Authority.
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