notices - See details
Notices
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Patrick (not verified)
28th January 2015 | 4:58am

I think one of the most important things to look for (behind low fees) is fund size. A small value manager for example, might be able to hold a 5% position in a small-cap stock without moving the price too much. A huge fund with many billions under management is more restricted as to what companies they can take a sizeable position in.

Another easy one to check, which you alluded to in point 3, is looking for closet index-huggers. If your fund managers top 10 holdings matches the top 10 of the index it is benchmarked against, it's unlikely to acheive alpha. This kind of thing is particularly prevalent in my home country, Australia, where the big 4 banks, 2 miners and 1 telco make up over 50% of the index weighting.