Levett wrote:"I wonder how many of the posters even know the manager names of these funds without looking it up? Are you planning to switch the fund when current manager leaves? Do you know how long your managers have been managing these funds?"
1. No, I don't know the names of the managers nor do I know where they went to college ( I assume they did) nor would I recognize them (he/she/them) on the street.
2. There have been manager changes/retirements during my time of investing and, no, I did not switch. Why would I?
3. No, I don't know how long the managers have managed the funds. I just know three generations of my family have owned funds managed by Wellington Management.
As you can see, we do not share similar concerns. Wellington Management has a very deep bench, and Wellington Management does not cultivate diva managers as some firms do.
Like others, I own some active-lite (tax-deferred space)+ some indexed (taxable space).
Thanks for response Lev. Sounds like in your case, these funds are in your family mostly due to family traditions / history.
I am not sure what "Wellington Management" really is? Isn't it just a name of an entity whose managers manage the money and come and go? So, how is it different from families where generations of them owned GM? GM have worked them well... until it did not.
Your funds may very well work for many more generations to come, I don't know, but then so can any fund, just as well. I understand the deep-rooted family traditions are hard to change, but I am curious if there is more to it than a tradition - is there anything inherent to these funds that gives them an edge over the market?
investor wrote:it is a management team that follows a strict criteria defined by the prospectus. The lead manager's change from time to time but the funds keep clicking along at pretty much the same pace. Showing that it is not the specific manager. Not the same manager picking equities that picks the bonds.
Ok, so I think you are saying there are in general 2 components to the alpha (i.e. to the return over the market):
(a) automatics "strict criteria" / "bounds" to which managers must adhere, and
(b) managers ability to deliver alpha.
You are saying (b) is relatively negligible compared to (a) in these funds because different managers over time delivered a positive alpha. You are further implying I think that there is not much point to worrying about quality of managers, because even if a "bad" manager is managing the funds, (a) will overwhelm the negative impact from the bad manager.
So, you are saying these funds have some ("magic" / "secret"?) formula that delivers better risk-adjusted returns that others have not found out or figured out over all this time, right? Further, managers that leave these funds are not taking this knowledge to their new funds apparently...
So, how does this fit with the research claiming this should not be happening? In other words, all this claimed research by Bogle and others indicating that this is impossible or extremely unlikely?
Can you (or anyone) reconcile for me the two?