We believe most people should hold the bulk of their investments in collective investments. The prime reason is simple: collectives reduce risk. They do this because most collective funds hold upwards of 50 or 100 different investments, and only if you are very rich can you afford to hold that many yourself. So we believe that the annual management cost of a collective investment should be viewed as a type of insurance premium. If you could not buy buildings insurance against the risks of fire and flood, you would probably prefer to own 1/100th of your own home and 1/100th of 99 others rather than own all of your own home. Likewise, collective investments reduce the risk of total disaster to minimal levels.

Collective investment funds cannot abolish risk; you still have the basic risk in whatever type of asset you choose, so if you choose technology funds the risk level is still high - just a lot less than the risk involved in owning one or two tech shares.

Choosing Collective Funds

Choosing collective funds is not easy. We know that on its own, their past performance is a poor guide to future results. Though we take historic data into account, our own emphasis is on continuous assessment. We believe it is the individual manager who is most important and we stay in regular contact with fund managers. We maintain a list of about 70 recommended funds which we monitor very closely indeed. Funds that cease to produce the results we want (performance among the top 25% of all similar funds) are thrown out.

We believe our methods enable us to select funds that will deliver above-average investment results over the long term.


Our current fund list is available as a downloadable pdf below:

Fund Watch May 2014

Fund Watch January 2014

Fund Watch November 2013

Fund Watch August 2013

Fund Watch May 2013

Fund Watch January 2013


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