The FCA are right!!

Now before you all think I have lost the plot please bear with me. I believe in active management, although I accept there are times when passive is best and I have and will use it where I feel it is appropriate.

Now the FCA has just produced a report on the active fund management sector and has not been particularly complimentary. They said “Our evidence suggests that actively managed investments do not outperform their benchmarks after costs and that some active funds offer similar exposure to passive funds, but charge significantly more.”

Now you may think this sounds like I should be running for the hills and denying all knowledge of this? Yet I agree with the FCA, almost. I would change the wording to “most actively managed investments” and this is a really important point to highlight. There are an awful lot of mediocre funds out there and very often they are the most widely held.Read more