Frequently Asked Questions
1) Do you consider all types of funds?
Yes but with some limits. The focus of the website is on the mainstream funds. It considers both active and passive funds.
Fund structures that the website considers include Exchange Traded Funds, OEICs, Unit Trusts and Investment Trusts.
There are some niche fund structures that will only be suitable for a small minority of investors. For example, a hedge fund registered in the Cayman islands with a minimum investment threshold..
2) How do you evaluate funds?
The focus of the website is on funds that invests in equities. This is because these funds have the best long-term prospects.
Equity funds do have meaningful downside risk but this can be managed to some extent. Strategies to manager the risk include. investing over time and investing in quality companies.
The focus on equity funds allows Fund Hunter to build up its expertise in this area. It is not possible to be a jack of all trades in the investment world.
There may also be scope to consider funds that invest in unlisted companies. However, private equity investing is difficult with the underlying fund holdings more challenging to evaluate.
3) What is the subscriber relationship with this website
Fund Hunter does not know the individual personal circumstances of subscribers. An IFA does seek to understand the personal circumstances of their clients. They are regulated and able to offer advice.
4) Why does Fund Hunter cover stocks?
If good funds own good stocks then we need to consider the stocks in more detail. I may also consider stocks that are of general interest- this helps keep my skill set sharp.
The first indication that a fund is going awry, in my view, is if we can find weak stocks in it. This indicates that the fund manager's decision making process is lacking discipline.
It may also be the case that some readers are interested in stock ideas. A look at the best funds is one way to identify them. However, this website doesn't give advice and is not likely to look at an individual company in any serious depth.
5) What is the Fund Hunter model portfolio?
This is a portfolio of funds that is designed to perform well over the long-term. It is what I would invest in if I could only invest in funds. At any one time I am likely to hold a number of funds in the model portfolio.
The model portfolio is not a real life portfolio. This is for a number of reasons. The first is because it is generally easier to perform well when real money isn't on the line (see research of how financial advisors can add value for clients).
The second is because I personally invest in funds and stocks. My background is in stocks and this helps me select funds - good funds own good stocks.
6) What is the purpose of the Fund Hunter model portfolio?
The model portfolio seeks to demonstrate Fund Hunter's approach to fund investing. That is all. It is therefore designed to have an educational purpose.
A second rationale for the model portfolio is that it creates more accountability. Otherwise it would be possible to write positively on a fund and then not mention it again if it performs poorly.
This is not possible if the fund in question has been added to the model portfolio. A decision would need to be taken on it. Fund Hunter would also have to explain why the initial enthusiasm for the fund was incorrect.
7) Do subscribers receive updates covering model portfolio changes?
Yes. An update is posted to the website every time the model portfolio is changed. Subscribers also receive an e-mail notification.
8) How do I personally invest?
I personally use a core/satellite system. The core is made up of funds and the satellite is made up stock ideas. I am a better fund investor because I invest in stocks.
I wouldn't advise anyone follows me on this path - stock investing is hard. It can be very rewarding but is also easy to get wrong.
The core/satellite approach, with funds as the core, is in my view the best way to approach stock investing. It can be summed up like this:
Only invest in stocks when you have good stock ideas to invest in