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18 May 2016

Six lessons learned over 20 years of fund management

Rob Burdett and Gary Potter, managers of Elite rated F&C MM Navigator Distribution

Rob and Gary, managers of Elite Rated F&C MM Navigator Distribution, have worked together longer than many people remain married: in April they celebrated their 20th anniversary.

During this period, the pair, together with the rest of the F&C Multi Manager solutions team, estimate they have hosted more than 10,000 fund manager meetings, attended 500 UK investment conferences and invested approximately £12bn in funds.

They have also managed money through three very big market crises: The Asian financial crisis (1997), the tech bubble (1999-2003) and the global financial crisis (2008/09). Here they outline six important lessons they have learned:

1. Investing is a people business

Fund selection is about understanding how a fund manager works, the team and people he / she has behind them and the corporate environment in which they’re working. Understanding what makes them tick is critical, as changing market or company conditions can significantly affect the outlook for a fund.

2. The power of a boutique

There is strong potential when investing in a 'boutique' fund manager (where the company only has a small number of funds and/or assets under management), rather than a big global fund management company. We have found that they generally have strong alignment of interest with investors, are typically unconstrained in investing style and are more likely to have a pure focus on portfolio management.

Top 10 equity fund management groups

3. Cost is important but value is vital

When an investor chooses actively managed funds rather than an index tracker, value for money is even more important. There are markets / sectors that exhibit a stronger case for going active than others.

4. Be the best informed investor you can be

Due diligence is as important when monitoring a portfolio as it is when selecting a fund. Funds that were once top of their game may have since become hamstrung by having attracted more money than they can invest successfully, have experienced a fund manager change or having been at the mercy of market events. Making sure a portfolio is current in today’s market environment is critical.

5. Admit if you are wrong and move on

We are all human and make mistakes. For investors, it’s about identifying these and not trying to ‘stick things out’ in the hope that markets or funds will turn in their favour.

6. Be involved in a fund when it is creating a track record, not living off it

Experience tells us when funds become over popular they can become too large to manage effectively. This in turn can have an impact on performance. It is vital to be aware of tomorrow’s funds today.



Where to next?
- Research the Elite Rated F&C MM Navigator Distribution fund
- How to choose a fund
- 7 tips to help you build the perfect portfolio


Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. Rob and Gary's views are their own and do not constitute financial advice.

©2016 FundCalibre Ltd. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. FundCalibre, shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use.