Tuesday, 22 November 2011
Cross with the Coop
A unit trust is a collection of shares that is chosen and actively managed by a bloke, or indeed high powered suited and lipsticked girlie, called a fund manager. The theory is that all you have to do chose the type of investment that suits your risk profile, whether you're a tea and slippers or an ice climbing type in the financial sense, and then sit back whilst all the work of collecting dividends and buying and selling shares to make the best use of your money is supposedly done for you. I chose the Coop Sustainable Leader's Fund, a balanced fund. That's somewhere in the middle of that risk spectrum, maybe akin to a high wire centre if we stick to the climbing analogies. The ethical stance associated with this product also was a feature that affected my choice.
So I've been sticking my monthly sum in this pot - and have made a hefty loss even though investing regularly should lessen the impact of falls in stock markets because of a phenomena called pound cost averaging. I realise that the global financial situation is sickly but even so. For much of the time performance tables have shown that my particular choice of fund has been way down compared to others of its type. Which begs a question? What has Mike Fox, the fund manager been doing with my money and why hasn't the Coop given him a good kick up the butt rather than giving him the post of head of UK equities? Could someone else or even little old me do a better job? Yesterday I asked for my diminished savings back so I'll be able to see!