Burdett and Potter: Our top fund selection tips over 20 years
Co-managers for 20 years
Rob Burdett and Gary Potter have been working as multi-managers together for 20 years, first at Credit Suisse then Thames River and now BMO Global Asset Management. The pair, who runs the firm’s Lifestyle and Navigator fund range, share their insight and experience in the world of multi-asset investing.
It's a people's business
Fund selection is about understanding how a fund manager works, the team and people he/she has behind them and the corporate environment they are working in. Understanding what makes them tick is critical, as changing market or company conditions can significantly affect the outlook for a fund.
The power of boutique
There is strong potential when investing in a boutique. They have strong alignment of interest with investors, are typically unconstrained in investing style, are more likely to have a pure focus on portfolio management, and are more conscious of capacity.
Cost is important but value is vital
When an investor chooses active, then value for money is even more important. There are markets/sectors that exhibit a stronger case for going active.
Be the best informed investor you can be
Due diligence is equally 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 capacity issues, have experienced a fund manager change or been at the mercy of market events. Making sure a portfolio is current in today's market environment is critical.
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.
Be involved in a fund when it is creating a track record, not living off it
Experience tells us, when funds become over popular and feature on many buy lists 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 and try to avoid funds that were industry darlings that may not be as attractive as they perhaps once were.