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Merryn Somerset Webb on fund management – why you often don’t get what you pay for

Writing for the Financial Times, Merryn Somerset Webb questions the value of actively managed funds in today’s economy. While the fund management industry used to be able to point to the fact that their expertise were a safe way to provide investors with long-term outperformance over the market as a whole, recent studies show that today it is almost impossible for a fund manager to maintain high performance over any stretch of time. In fact, one of the key indicators of a fund manager being in the bottom quartile over a 5 –year period is having been in the top quartile in the previous half of the same decade.

Fund management

She goes on to suggest that the traditional mindset which assumes the most important factor for the success of a fund is the skill of those managing it is actually not the case.  Recent research by Russel Kinnel, Director of Research at Moring Star suggests that cost – not skill – is the key indicator for a fund’s success. He found the cheapest funds to be up to here ties more likely to succeed than the priciest funds.  So it seems that buying cheap will mean you have a significantly higher chance of making money than if you invest in a more expensive fund. In other words, you don’t get what you pay for!

Buying cheap passive funds and holding them long term appears to be a sound alternative for individuals. In this scenario, one still gets any benefits from good fund manager practice, without incurring the costs associated with a more expensive fund. Read the full article published by the Financial Times ‘Fund management – why you don’t always get what you pay for

For more information, or to book Merryn for an event of conference, please get in touch wth Gus at gus@chartwellspeakers.co.uk

LSE Lecturer Keyu Jin on the role consumers play in rebalancing China’s economy

Keyu Jin speakerSpeaking on “Bloomberg Surveillance”, London School of Economics Lecturer Keyu Jin and Larry Hatheway, chief economist at Gam Holding, talk about the role consumers play in rebalancing China’s economy and the business prospects for the UK and China.

Keyu argues that she’s wary to talk about rebalancing towards consumption, when seeing that the Chinese household share of GDP is falling from 70% to 60%, compared to other countries which stay at a constant 80%. By repressing the household, Keyu believes that it’s difficult to stimulate Chinese consumption, regardless of the expansionary policies that are being implemented.

For more information, or to book Keyu Jin as a keynote speaker for your conference or event, please contact Leo von Bülow-Quirk at leo@chartwellspeakers.com or call 0044 (0) 20 7792 8000.

Nick Southgate outlines what businesses can learn from behavioural economics

It was a pleasure to have Dr Nick Southgate drop by the Chartwell office. Over coffee he told us why businesses need to think more about thinking: all too often organisations overestimate the degree to which customers/clients think hard about their decision, and underestimate the degree to which people do a lot of things without thinking very much about them at all. Grasping this concept is crucial to engaging consumers and clients.

You can listen to the full interview below.

For information on how to book Nick for your conference or client event, please contact Leo von Bülow-Quirk at leo@chartwellspeaker.com or call +44 (0) 20 7792 8000.

Make a perk work with Philip Delves Broughton

Business and management expert Philip Delves Broughton’s latest column in the Financial Times is an interesting read. Philip talks about work perks following French bank Crédit Agricole’s decision to dramatically reduce travel and entertainments costs which has induced employees’ rage. He claims that this reaction “reflected the diminution in status of investment bankers more generally… they are having to adapt to the reduced perks of more ordinary corporate executives.”

Philip believes that perks not only a powerful tool within a business, but are also reflective of a company’s health and their attitude to workers.

In his article, he compares the perks offered by a variety of companies; including Google and Facebook in the technology sector who use their huge budgets to create “corporate Disneylands from which employees need never venture.” Even smaller start-ups appear to compete with these giants by allowing dogs to be brought into the office and providing top quality beverages.

To discover whether these work Philip looks to Sociometric Solutions, a company whose research identifies two categories of perks: those which benefit an individual and those which encourage socialisation. Nevertheless, it seems that companies themselves need to measure effectiveness and activity as for some businesses socialising is positive yet for some too much can be detrimental to sales and thus profit.

Philip quotes Professor Robard who argues that the most important thing is not what the company offers but how these perks are perceived by employees.

His conclusion is interesting: “Perks..need to be consistent with the broader values of the company, as once you give them, they can be very hard to change.”

Click here to read the article in full

“The path to power and how to use it”: Philip Delves Broughton reveals all..

Author and business management expert Philip Delves Broughton also writes for the Financial Times and his article ‘The path to power and how to use it’ makes an interesting read. Taking into consideration the writings and research of various others, Philip explores why power has such bad connotations in the business world today and why it is that “it is not just our attitude to power that is changing. It is the nature of power itself…”

Although companies prefer to use softer terms such as ‘influence’, Philip notes that within any organisation it is clear to all who has power and who doesn’t; we still understand what it means and what it can achieve.

Philip discusses the idea of ‘power deficiency’, coined by Jean-Louis Barsoux and Cyril Bouquet, and their strategies of ‘play the game or change the game’.  He also draws from the 1976 article ‘Power is the Great Motivator’ which describes three motivational groups of managers and reveals that those who were most interested in power were the most effective. Finally, Philip looks to the “far darker vision of managerial power” proposed by Jeffrey Pfeffer, which encourages people to “get real” and ignore the barriers that stand in the way of gaining power.

To conclude, Philip acknowledges that “Call it what you like, raw power, its acquisition and use, still count in business.”

Click here to read the article in full

Click here for more information on Philip as a speaker

Dr. Nasser Saidi appointed deputy chairman of Eureeca

Expert on Middle Eastern finance and economics Dr. Nasser Saidi has been appointed deputy chairman of the Dubai-headquartered website Eureeca. Designed as a regional and internationl business platform, the site “operates as a marketplace for both businesses looking for funding and crowd investors seeking new investment prospects.” With a lower investment barrier to enter, Eureeca offers a wider pool of investor potential.

Nasser’s extensive business and financial experience make him an ideal deputy chairman for the website which was founded by experienced entrepreneurs and former investment bankers. Commenting on its launch last month, he said “Eureeca provides an alternative solution that addresses the persistent needs of entrepreneurs and SMEs for growth capital and has the potential to become a significant catalyst in developing the SME sector in the region and globally.”

Click here for more information on Eureeca

 

 

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