Trackers or managed funds

I wanted to make a small change to my SIPP funds the other day. I am pretty underweight in North America (which means I’ve missed out a bit over the last year) so I looked at which fund to get.

I filtered the choice to avoid smaller company funds and to avoid charges over 1%. Then I looked at the funds with the best performance over the last 3 years – maybe fund managers who did well over the last 3 years are good stock pickers. The image shows 7 of the best funds, though I did check the fund selection and ignored a couple that had achieved brilliant returns by being very heavily invested in FAANG which is rather a gamble. You can see the performance each year, the cumulative performance over 1 year, 2 years, etc. annualised , and that cumulative performance minus the annual charge.

The cheapest tracker I saw was the Legal & General one. It doesn’t look anything special at first glance, but analysed the same way as the other funds it looks pretty comparable. Remember, the managed funds were filtered in hindsight to be the better ones – hindsight is a wonderful thing. The further back I look, the more good/lucky stock picking is balanced by bad/unlucky. (Investec’s spectacular result in 2016 seems to have resulted in their manager being poached or retiring, because I see a change of manager just afterwards!)

So I got the Legal & General tracker. Fingers crossed!

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