Improbably enough, my one epiphany came at a financial awards dinner and through the medium of political pundit and Daley Thompson lookalike John Pienaar as, ahead of dispensing the obligatory mix of citations and Plexiglas mementoes, he underscored the importance of journalists being sceptical, not cynical.
His point was that a cynical media would ensure the only people who became politicians would be those who really, really should not – and there is no happy ending in that scenario. I realised there was a similar dynamic within financial journalism – a default position among much of the press that the industry is populated by baby-eating pirates out to fleece their punters.
That serves to encourage some already pretty defensive businesses to build their barricades of bland press releases and no-comments and thus further undermine investor communication and education. From that moment, I resolved to let scepticism, rather than the cynicism I had occasionally felt encouraged to think of as a badge of honour, inform my view of the investment world.
Among other things, this has allowed me to accept that the mere fact a fund house is focusing its attentions on selling a particular product does not by itself mean that product should not be bought. That would be cynicism and would hamper telling the legitimate investment cases from what we born-again sceptics are still able to see as bandwagon-jumpers.
This worldview comes in handy whenever I chair conferences, as I did recently as the 2015 Alpha Generators Roadshow flew the flag for the benefits of active investment management. The cynic might snort at two companies having the same focus as last year – F&C on property, Aberdeen on strategic bond portfolios – but what about the sceptic?
Of the two, property seems the clearer case. After all, it was easy to spot a property fund manager last year – they were the ones with smiles on their faces and that attitude appears to have continued into 2015. After some torrid years, they know this is their time to shine and it is hard to begrudge them a chance to prove it.
Fixed income is trickier. Certainly some bond investors also had cause last year to beam from ear to ear – those in gilts being an obvious example – only I suspect that they did not dare tempt fate. They were also in a minority because, as The Adviser Centre snappily wrote for me, 2014 was a year when “overwhelming consensus on bonds proved overwhelmingly wrong”.
Last year may have been a ‘could do better’ one for strategic bond funds but, for those wanting fixed income exposure, it was tough to make the case against them in January 2014 – and arguably even tougher now. With Blackrock, another roadshow participant, pointing out that, from any couple aged 65, there is now a 50% chance one will make it to 92 and a 25% chance one will reach 97, the fact a fund house is pushing a particular investment strategy is in itself no reason to dismiss it.
Julian Marr is editorial director of Adviser-Hub and co-author of ‘Investing in emerging markets – the BRIC economies and beyond’
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