For reasons made obvious by this headline, a majority of advisers, particularly those with so-called ‘Centralised Investment Propositions’, now recommend passive or tracker funds and portfolios. Vanguard, the giant US mutual has specialised in these for many years, and started to preach the word very effectively over here some fifteen years ago. That word was that the lower costs of funds without managers trying to beat the markets and buying and selling accordingly, outweigh the extra performance supposedly generated by all that activity. Back then they could say that at any given time only half of those active managers did better. Now, as passive funds have become more diverse, sophisticated and still cheaper, it’s less than 15%. And those usually comprise managers going out on a limb and taking a chance on smaller companies or bets on the market which sometimes come off. Often they don’t, as Woodford investors will attest. AI is likely to increase that level of sophistication still further. So, like it or not, and many still don’t, it is, or they are, the future.
“Cash ISA allowance could be cut this month”
Our mantra has long been ’straightforward advice that you can understand’. That can mean trying to simplify the many complex products and options with which the world of finance tries to befuddle its target audience.
