Personal Finance Feature - Equity fund vs index investing

Personal financial adviser Warren Ingram says active fund managers in South Africa have had a terrible time.

If you have looked at your investment statements over the past five years, you have reason to wonder why you pay what you do to people who manage your money when you don't get the returns you might have expected.

Of course, markets do go up and down and the country's politics cannot be ignored but if you pay a large fee to an active manager, you would expect a "superlative return".

Bruce Whitfield on The Money Show speaks to Warren Ingram, personal financial adviser and executive director at Galileo Capital, for more.

Active fund managers in South Africa - big and small- when choosing shares, have had a terrible time, partly because of the economy and partly because of factors like lack of skills. If they were deeply skillful and understood their companies incredibly well, they should have stood on less landmines than they have. Unfortunately the data is not kind to them.

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

There is a company called Standard & Poor's Dow Jones indices. They look and indices around the world, do a lot of research and say: 'Ok, let us look at how fund managers compare to these indices around the world and in different markets.'

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

They're telling us that at the of 2019, 93% of all South African fund managers who manage share portfolios or equity funds cannot beat the top 50 share indices in South Africa.

Warren Ingram, Personal financial adviser and executive director - Galileo Capital

Listen below for the full interview...

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