Post by rgs2001uk on May 23, 2018 22:11:35 GMT 7
It may not be a good comparison in mandate, but it's an excellent metric of their skill (or lack thereof). With the fund they can do pretty much whatever they want, use all their best ideas. Unfortunately, they have not done particularly well.
As for the relative performance of IPE, as far as I can tell it's not hedged, so the performance will have been boosted by a fall in the value of Sterling. That, for Read/Causer, was simply good luck.
The simple conclusion is don't invest in the tactical bond fund, that's not where their skill sets seems to be.
To say they lack skill in another field is meaningless unless someone plans to invest in that field, which I wouldn't recommend.
An analogy would be Anthony Bolton. It's like saying he was a poor equity investor and lacked skills because he did poorly in investing in China equities. A more discerning investor though would highlight that he was an excellent fund manager in the UK special situations field, where he excelled for years.
No point judging his UK special situation fund skills based on his Chinese equity skills. The former is well worth it, but the latter don't touch with a barge pole
Neil Woodford is possibly another. He has excellent skills in UK equity income. Much less convincing (though early days) is his skills in UK venture capital investments.
I also used to see this regularly in investment banks. Spot traders don't necessarily make gone strategic derivative traders and vice versa. Their skill sets are different. To judge a spot trader on his derivative investing skills makes no sense. Differentiate.
The point to draw from your analysis is while the 2 Pauls do very well on the more plain vanilla bond stuff (like the spot trader), they don't seem do so well on the strategic stuff (like the derivative trader)
If you want bread, buy it from a baker, not a blacksmith
It's rather disingenuous to put their out-performance in that particular field down to luck. Don't forget:
1)they've been doing this for the best part of two decades. Not just since Sterling's devaluation
2)every other fund manager would have been subject to this same "luck". Many global bond funds denominated in sterling are unhedged. Probably most. Even if random winners and losers, this is very unlikely to be the reason they are near the top of the performance table you describe and have exceeded that 7%. If luck, we'd expect quite a lot more lucky investors up there too, they are unlikely to be the only ones, given the level of not hedging in the sector
3) the positions they have now in currencies are snap shots in time and may bear no reflection to what they did in the past
A quickie for you guys who know more about these things than I.
Am I missing out on anything by not investing in UTs?
As you are aware I am into ITs, divis reinvested etc etc, my holdings have already been posted on other threads.
Am I just an old dog who is already to old to learn new tricks?