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Thoughts and views from our wealth manager study


If managers do not invest in their own funds, why the heck should I’

When actively considering a fund for a client portfolio or buy list, most of the criteria used by wealth managers to screen and evaluate products are hardly surprising.

Long-term sustainable performance is clearly vital – alongside other obvious areas such as strength of process and team, portfolio size and health of a parent company.

However, one characteristic often underestimated is the importance of fund managers who back their convictions and actively invest in the products they run.

Recent qualitative findings from Research in Finance has found fund manager investment in their own vehicles is a favourable requirement for a majority of large UK fund selectors.

“It is one of the first questions we ask a fund manager in our exploratory meetings. It shows that their interest are aligned with the investors of the fund,” an investment manager from one of the UK’s largest wealth management firms revealed.
Another fund selector added: “I am a big fan of fund managers putting their own money into their funds. If they don’t invest in their own funds, why the heck should I.”

In addition, fund selectors also have a particular interest in the personal investments of managers running two or more different strategies. “The really interesting question comes when a manager runs more than one fund. We asked someone the other day about which one of his funds was he investing in right now. That was an eye opener.”

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