Our latest poll shows that almost 67 per cent of 293 respondents prefer to hold single-manager funds in their portfolio, compared with 18 per cent who like the diversification multi-manager vehicles offer, and 15 per cent who stick with trackers.
Source: Trustnet.com
The comments come in spite of research that shows active funds often underperform their passive counterparts.
Industry experts say flexibility, control, and the potential for high returns are what continue to lure investors to active funds.
"Active funds offer a much greater choice, portfolios can be fine-tuned to what the client needs. Active managers do outperform, not all of them of course, but if you are a fund picker you’re not aiming to pick the average, but the best," said Tim Cockerill, head of research at Ashcourt Rowan.
"Passive fund selection comes down to simple asset allocation, whereas with active funds you have to make the asset allocation call."
"Multi-manager funds take away much of the decision making and lots of investor don’t want that, they like to use their own judgment about funds."
Whitechurch’s Ben Willis points out that investor pride can add to the equation.
"Most investors who visit Trustnet do so because of the hard data you supply and because they want to and are happy to select their own funds," he said.
"Because of this they probably have a good understanding of which fund managers are good, have the best track record and/or are generating the highest profile."
"This means that they would shun the passive approach as they believe that they can select funds that can beat the market or benchmark, and they would shun multi-manager funds as they believe that they can do better by selecting their own portfolio of funds."
AWD Chase de Vere’s Patrick Connolly warns not to underestimate the lure of star managers.
"Many investors, and advisers for that matter, still believe that there are star fund managers out there who will consistently outperform, and that they are capable of identifying those managers."
"The reality is that this is not always the case and many investors end up underperforming or taking more risk than they appreciate."