The Relative Performance of Individual Funds

Table 3: Performance of individual funds since inception

Table 3 shows the performance of technology funds since its inception and its performance relative to their benchmarks. Three funds did not publish its benchmark returns. We had to use the NASDAQ’s returns as replacements. From Table 3, we see that the relative performance are mostly in red. This means that a great majority of the funds underperformed its benchmarks. Some underperformance were as large as –38.9% while some could slightly outperform by 2.18%. The lesson here is that while many investors lost money because of market crashed, many lost even more money because of poorly managed funds. Therefore there is a risk of losing much more money in poorly managed funds. Investors must avoid poorly managed funds at all cost – not just technology funds but any funds in general.

Conclusions

1. Any investment that seems to be attractive but has no fundamental is guaranteed to be money losing
2. Never invest because of the crowd. Be very cautious when investing in the latest "hot funds"
3. Never attempt to unreasonably overweight on any sector or region
4. Always be diversified across all countries and assets
5. The professionals did not know when the market would peak. So retail investors who think they know how to time their investments are kidding themselves
6. The professionals did not know that the market was in the bear. Retail investors who think they know are kidding themselves.
7. The professionals did not know when the market had bottom out. Retail investors who think they can time the market by investing in the "low" are kidding themselves.
8. Poorly managed funds caused investors to lose more money then they should. Avoid poorly managed funds at all cost.

Wilfred Ling is licensed by Monetary Authority of Singapore to provide financial advice to individuals domicile in Singapore. He is a representative of Promiseland Independent and can be contacted at This email address is being protected from spam bots, you need Javascript enabled to view it .

This article provides advice in a generic fashion and should not be construed as a personal advice. The author is not liable for any losses directly or indirectly for anyone using the information of this article. Only through a proper fact find process can an advice be personalized. If in doubt, please feel free to request for a non-obligatory consultation.

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