Can fund managers deliver value?

Top fund managers do add value for investors, says a recent study. So should we forego trackers and hunt down the best fund managers? Tim Bennett reports.

"Rejoice, active fund managers!" says Adam Lewis in Fund Strategy. According to the latest research on fund management performance, the best fund managers are worth paying for they do have the ability to add value for investors. The bad news is that tapping that extra value as a retail investor is fraught with difficulty.

Researchers at specialist fund evaluation firm Inalytics set themselves two challenges. The first was to define what constitutes skill (or alpha') in fund management. The second was to work out what extra return an investor could expect to earn from following the best managers.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.