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Wax on, wax off

A little self-knowledge can be a dangerous thing. For sure, it’s not all it’s cracked up to be in all those martial arts movies – you know, when the venerable guru obliquely advises the hero between fights. Charged with finding a suitable self-knowledge quote to kick off this piece, my faithful research assistant Ms Google found: “Knowing others is intelligence, knowing yourself is true wisdom.”

She tells me it is from the greatest of all quote merchants, Anonymous, but I don’t know – it sounds more like The Karate Kid. Either way, I don’t like the idea of self-knowledge because a tiny bit came to me the other day and it did not make me feel that great about myself. To make matters worse, it came to me while I was reading a Mail article.

I choose my words carefully because I was not doing anything as dangerous as reading the paper. I am not instinctively a Mail reader. My father is and it seems to make him happy – except all the times when the stories just make him very, very angry – but not me.

What I am, however, is the recipient of a useful little service from the good, good PR people at Penrose, who daily scour the national press for personal finance-related articles and email out the links. Well, I say “scour” – there are days when I suspect the intern munchkin’s heart is not quite in it – but on the whole it is terribly helpful and the other day was just such an occasion.

“Ditch the manager and pick up a tracker fund” bellowed the headline with the Mail’s customary uncertainty and self-doubt. “Oh, here we go,” I thought. “Here’s another article in a national newspaper that really ought to be spons-ored by Vanguard.” Nor was I disappointed.

Opening line on how millions of investors – really? – would be better off switching to trackers? Check. Sorry tale of how the majority of funds don’t beat their benchmarks? Check. Quote from Alan Miller to remind us there is nothing worse than the preaching of a reformed anything, not least a reformed active manager? Check.

Comments from a couple of industry folk associated with funds whose top holdings are not very different from the Footsie’s? Check although, of course, there was no refer-ence to actual weightings and I am not certain Psigma income and Alliance Trust would be top of my list of supposed closet tracker Aunt Sallies in this regard. No, for me, it is offerings from banks and life offices every time.

Sudden realisation about just where this hack fits into Her Majesty’s financial services industry? Che…no, hang on a moment – that’s not supposed to happen. Suddenly I remem-bered a line – a rant perhaps – I used to favour maybe 10 years ago about how the whole industry revolves around vested interests.

Look, I am not claiming to have been offering any great insight on this point, nor am I about to tick off all those interests – “How art thou vested? Let me count the ways.” But I guess I did not care to look too hard as to where my own interests lay beyond the reluctant acceptance that my salary was funded by advertising.

Yet why do I refuse to give up the belief that, just occasionally, active fund managers can deliver the goods? Why does it sometimes feel like I am the only journalist suggesting the heresy that there are some pretty decent arguments for including both trackers and active funds within the same portfolio? Have I gone native?

I don’t think so. What I do know for sure is that I cannot afford to get so introspective every time a newspaper decides to take a pop at active management – not least because that is going to be happening with increasing frequency as the RDR deadline approaches and the battle lines are drawn between those who fancy their chances pushing trackers and the admittedly smaller camp who do add value running active funds.

Still, I am not quite ready for this self-knowledge thing so can Ms Google help? Of course she can. “’Know thyself’?” said Goethe. “If I knew myself, I’d run away.” Not bad. “Only the shallow know themselves,” said Wilde. Yup, that guy has all the best lines.

Julian Marr is editorial director of and


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