Forget brokers - follow the fund managers

Over the last few years the fund management industry has become increasingly disenchanted with the research churned out by brokers…

Over the last few years the fund management industry has become increasingly disenchanted with the research churned out by brokers, says Jeremy Lacey in Shares. And quite right too. Last year's scandals blew the lid on the analyst practice of issuing glowing reports on companies they were privately rubbishing in order to protect the cash their firms were making from the very same companies as investment clients. For many fund managers and investors this only confirmed that much of the research they received was at best "chip wrapping".

So today, rather than taking much notice of broker reports, surely investors are better off following a fund manager's lead? After all, they are not trying to sell anyone anything, they're the ones spending and making the money, and they have "already sifted the broker research wheat from the chaff". They also tend to have done a great deal of their own leg work, visiting companies and crunching numbers before making their investment decisions. Many of them now have in-house research teams, too.

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