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Blast from the past
12.7 %
- average UK RPI inflation in the 1970s
The experiences of the 1970s cast a long shadow : the decade is remembered as one of high inflation , rising interest rates and a catalogue of policy mistakes . There are mounting fears that we are in a similar situation today where inflation appears persistent , borrowing costs are rising and households face a significant decline in their living standards . For fund managers , it represents a fundamental reshaping of the investment landscape , where growth is scarce , liquidity is drying up and sentiment is poor . The problem is that few fund managers today were also working in the 1970s . As such , it is impossible to judge them on their performance in similar circumstances .
So what should investors be looking out for when picking a fund manager to guide them through this difficult environment ?
Collective wisdom Collective wisdom and institutional memory will help . Stuart Widdowson , manager of the
Odyssean Investment Trust , says : “ I wasn ’ t managing money in the 1970s , but a number of our advisers were , and we draw on them a lot . We also have the benefit of two of our non-executives on the asset management company , who were there in the last crisis .” It is also reassuring if a robust risk assessment is already part of a fund manager ’ s process – they can ’ t suddenly start checking for strong
/ 24 / trustnet . com