Investment opportunities are found everywhere. Many investors abroad and an increasing
number of local investors invest through mutual funds or more popularly known in
Malaysia as unit trust funds managed by professional fund managers for better and
more secure returns.
Are fund managers competent enough to handle our hard-earned money? Are fund managers
who hit a 80% return within one-year period simply pure lucky? These are some of
the questions normally debated by the investors. In any case, it is the investors
who will be most affected.
You may come across news in the international media where respected fund managers
who headed reputable investment banks were terminated as a result of their poor performance
where a man on the street can equal.
A fund manager could be the absolute winner over a few years and underperform the
market dreadfully the following years. Some fund managers despite rosy advertising
of their funds, simply fail to perform and that raises the question about the true
caliber of the fund managers. It is no surprise that there are relatively few managers
who beat the S&P 500 Average or the KLCI with consistency.
Investors would scream when fund managers stay conservative while the rest of the
competitors perform remarkably well in a soaring stockmarket. It is simply not easy
for ordinary investors to accept the fact that they received returns of less than
a sen from a fund that had promised so much and are managed by high-profile fund
managers who are paid handsomely every month.
Managing other people's money is a profitable business and fund managers are paid
to deliver results. Investment losses produce unemployed managers. The usual excuse
given by the fund managers on their poor outing is that the results are unsatisfactory
despite the managers' best efforts. But when the funds deliver returns, then it is
because of the managers' efforts and skills, forget about everything else.
There seems to be a growing concern among the investors everywhere as to how well
the interests of the investors have been served by these "so-called" experts.
Some investors in fact argue that some fund managers are no better than them. The
only distinction is they, the fund managers have more money to play with - more allowance
to cover losses?
Uninformed local investors in a largely conservative Malaysian financial market will
not prefer anyone like Nick Leeson who, because if his uncontrollable activities,
created a chapter in the history by bringing down one of the oldest bank in the world.
While there are many capable fund managers around in the various financial markets,
there is always a risk that you might bump into someone who performs well one day
and flops the next.
Market experts very often come up all kinds of predictions and strategies but do
investors actually count how many times are right or wrong? Some fund managers or
market analysts had painted a very bullish picture of the local stockmarket at the
beginning of year have had to revise their opinions right now.