Trust is hard to build and easy to break, especially when it comes to your money. But there are some things you can look for when deciding where to invest your money.
How to know who to trust when investing
In a recent survey, we asked our customers and followers what was stopping them from investing. Almost a fifth said they didn’t know who to trust. So what makes a trustworthy fund manager?
Why does trust matter?
When it comes to investing, it can be difficult to know where to put your hard-earned money and who to trust with it. Losing money would be devastating to anyone, especially whilst you’re trying to improve your standards of living or build a pot for a better financial future. With some high profile cases, investors have got more than their fingers burnt, which is why it’s more important than ever to know who’s making those important decisions with your money, and it’s even more crucial that you trust them.
Actively managed funds, like our ES Multi-Manager funds, are run by a fund manager and a team of talented traders and fund analysts with a depth of market knowledge and years of experience. This team is invaluable when considering new opportunities or exiting full valued investments, so it’s important to trust the team as well as the fund manager themselves. Ultimately, they’re all looking after your money when you invest in a fund.
What’s important in a fund?
There are a number of factors that you can (and should) look at when deciding who to trust with your money, such as:
Having an open and honest fund manager is one of the best ways to build trust. Regular updates and communication is one way you can tell that a fund manager cares about you as an investor.
For example, we regularly update our website with monthly factsheets for each fund as well as quarterly reports with a more in-depth look at points in the factsheets and our thoughts on the market outlook. You can even find a list of the funds’ investments in the factsheets so nothing is hidden.
It’s very possible that you might have questions about a fund that you’re invested in, but getting hold of a fund manager can be a real pain sometimes; getting hold of anyone within the fund is often difficult. It’s important that you have a way to get in touch and ask questions if you have them; ultimately it’s your money that’s being invested.
Our fund team is always happy to help and can be reached at firstname.lastname@example.org. We’ll also answer any questions on any of our social media channels, which can be found below.
Looking at the past performance of a fund is probably the most commonly used method of research you might do. While past performance isn’t an indicator of future performance, it’s useful to know how a fund has performed so that you can build your judgement of a fund manager and their team.
Most fund managers will work their way up the ranks, starting out as part of a team and building experience until they can manage their own fund. Through this process, they learn strategies, skills and build out their knowledge of the markets. Having a lot of experience doesn’t necessarily mean that a manager will be good and trustworthy, but being able to see that they have worked on or run successful funds can be an indication that they can be trusted.
Understanding how a manager approaches their investment decisions plays a key part in trusting them. Most fund managers will lay out the strategy of their fund, and this will give you an idea of the thought process and risk involved.
How we’re different
As the manager of our Multi-Manager Funds, I spend a lot of time seeking out fund managers I can trust to invest your money in. A large part of that time is building relationships, looking for like-minded individuals and teams that may have interesting investible opportunities. We need to believe that we can get an advantage from investing in them and their ideas.
The very best part of what we do is building those relationships and building strategies which we believe can, over time, deliver a superior outcome based on the vast amounts of data and material my team and I consume and debate on a daily basis.
Having those relationships in fund managers that we trust is partly why we’ve never had to suspend our investment funds from trading, even through the Great Financial Crash of 2008, and any of the subsequent market drawdowns since. It’s also down to the fact that we are constantly evaluating our positioning. We spend a significant amount of time looking for and understanding various types of risk, making sure we are sufficiently diversified and not putting all our eggs in one basket. Our aim is to balance the funds appropriately, to protect or take advantage of the opportunities market conditions may present. Historically, we have delivered good performance taking less risk than the general market.
It’s a very personal and privileged experience looking after investors’ hard earned money and, by being invested in the Multi Manager Funds ourselves, we are able to enjoy the successes along with our investors.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.
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