EDITOR’S LETTER
IN THIS ISSUE
Issue 18 / May 2016
WEIRD AND WONDERFUL
The obscure parts of the market
you can access with ETFs
INCOME TRACKS
Can you build an income-paying
portfolio out of passives?
FROM LITTLE ACORNS
Small steps that can have a big
impact on your pension
A
MONEY
FOR
NOTHING
Is active management worth paying for?
ISSUE 18
CREDITS
TRUSTNET MAGAZINE (FORMERLY
INVESTAZINE) IS PUBLISHED BY
THE TEAM BEHIND FE TRUSTNET IN
SOHO, LONDON.
WEBSITE: WWW.TRUSTNETDIRECT.COM
EMAIL: [email protected]
CONTACTS:
Anthony Luzio
Editor
T: 0207 534 7652
Art direction & design
Javier Otero
W: www.feedingcrows.co.uk
bout 99 per cent of the copy we publish in
this magazine and on the main FE Trustnet
website is focused on actively managed funds.
The reason for this is not, as the more cynical
readers may suggest, because a similar proportion of our
advertising revenue comes from groups promoting active
funds, but because there is a view among journalists that
there is little of interest to write about passive funds after the subjects of cost
and tracking error have been covered.
However, Robin Powell, who blogs at The Evidence Based Investor,
has blown that argument out of the water with a lengthy and
detailed piece on the actives vs passives debate. He makes a number
of arguments that make even a committed actives advocate such
as myself sit up and re-consider why I have always preferred the
more expensive products. Has it made me sell out of the beloved star
managers in my portfolio in favour of index trackers? Not quite, but it
has certainly made me think twice about using them in future.
This edition also features articles from Adam Lewis about whether
you should build an entire income portfolio out of passives, and
Pádraig Floyd, on the weird and wonderful parts of the market that
ETFs can give you exposure to. For investors who are looking for even
more diversification, Phil Scott reviews the investment trust sectors
given the “Specialist” prefix by the AIC.
In our regular columns, John Blowers advises on how small changes
to your saving habits can have a big impact on your pension pot,
Schroders’ Kevin Murphy tips three banking stocks to rebound and
Thesis Asset Management’s Gaurav Gupta reveals which fund he is
using to navigate the bond market volatility.
28
Enjoy reading,
Editorial
Gary Jackson
Editor (FE Trustnet)
T: 0207 534 7680
Alex Paget
News editor
T: 0207 534 7697
Daniel Lanyon
Senior reporter
T: 0207 534 7640
Lauren Mason
Reporter
T: 0207 534 7625
10
Anthony Luzio
Editor
Trustnet Magazine
Sales
Richard Fletcher
Head of publishing sales
T: 0207 534 7662
Richard Casemore
Account manager
T: 0207 534 7669
Photos supplied by Thinkstock and
Photoshot
Cover illustration: Javier Otero
18
In association with:
MONEY FOR NOTHING Robin Powell says simple arithmetic shows why active management isn’t worth paying
for P. 2-5 / INCOME TRACKS A smart beta approach to an income-paying portfolio could help investors cut
costs, writes Adam Lewis P. 6-9 / WEIRD AND WONDERFUL Pádraig Floyd looks at the obscure parts of the
market that ETFs can offer you access to P. 10-13 / FUND, PENSION, TRUST Hermes Global Emerging Markets,
Guinness Global Equity Income and Scottish Mortgage Investment Trust find themselves under the spotlight
this month P. 14-17 / FOR NONE BUT THE BRAVE The various sectors given the “Specialist” prefix by the AIC
can offer investors instant diversification, but Phil Scott says they are not for the faint hearted P. 18-22 / FROM
LITTLE ACORNS… Making a few small changes to your saving habits can have a big impact on your pension pot,
writes John Blowers P. 24-26 / WORTH BANKING ON Schroders’ Kevin Murphy reveals which battered British
banks he thinks are set to bounce back P. 28 / WHAT I BOUGHT LAST Thesis Asset Management’s Gaurav Gupta
explains why he is using Muzinich Global Tactical Credit across a number of his portfolios P. 29