You may have already seen the first part of the upcoming 10-part documentary on passive investing [1] by Sensible Investing [2], as I featured it in Saturday’s Weekend Reading [3].
I think the rest of this series looks very promising. There’s a roster of high quality interviewees to come and the videos make the case for index funds versus active fund management in a down-to-earth fashion.
So I’ve decided to run all the videos as they appear here on Monevator.
You’ll find part one in the video series – entitled How to Win the Loser’s Game – below. Please note that if you’re reading via email you may need to visit Monevator to see the video.
Perhaps the killer line in this video is the revelation that one single fund manager was paid £17.5 million in 2013.
That’s 600 times the average UK salary!
Of course the high costs spread far wider than just one person. Indeed, at one fund management company surveyed, the average salary was a cool £436,000.
As Lars Kroijer – himself a former hedge fund manager – has previously revealed on Monevator, paying for the high costs of active management [4] hugely reduces just how much the typical investor in active funds will earn over their investing lifetime.
Given the evidence that the average active fund fails to beat the UK market [5], you must really like fund managers if you want to keep them in sports cars and Mock Tudor mansions at the expense of your own retirement [6]!
Oh, and in case you’re wondering, the title of the video refers to a famous article on the poor odds of active fund management written by Charles D. Ellis in 1975, which he’s updated in his recent book, Winning the Loser’s Game [7]
Check out the rest of the videos in this series [8]so far.