9 December 2015

Explore the figures, especially the costs

In Barry O’Neill’s most recent article in the Press & Journal he reinforces the importance of looking closely at the cost of your investments, with a view to minimising them to maximise returns.

Barry refers to a recent study that suggests the average ongoing cost of holding an investment in a traditional actively managed UK equity fund has fallen from 1.6% in 2008 to a current figure of 0.91%.

This may appear to be good news, however on closer inspection the new lower figure doesn’t take into account the administrative cost of holding the fund on a fund supermarket or platform or the any payment to an adviser. By contrast, the 2008 figure included both of these. It is a reminder that you need to fully understand what your investments cost and review your investment strategy to make sure it is best placed to deliver the returns you need, especially during hard times.

Barry also cites the findings of a study by the Pensions Institute that concluded the overwhelming majority of active managers were not simply unlucky with their stock selection and market timing, but were “genuinely unskilled”. And, even when these managers did pick the right stocks, any potential extra returns were wiped out by their fees.

Once again, it is an enlightening article where Barry advises that you try to minimise cost to capture more of the returns available from investment markets. In fact, he indicates you could pay one-tength of the cost of the average actively managed fund, with very little additional trading costs by adopting a long-term “buy and hold” approach.

You can read the whole of Barry’s article here, or by clicking on the image below.

If you would like to discuss your financial planning options, please contact us with any questions you might have. You can do this by calling our head office on 0131 220 0000, or by emailing us at or you can also follow us on Facebook, Twitter or LinkedIn.

You can view Barry O’Neill’s profile here.

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