M&G European Funds - Performing Badly?

Aug 19, 2006 2 Replies

I have been an investor in M&G's European Index Tracker Fund for the last 5 years. During that period the fund has risen 23% whilst the FTSE World Europe ex UK Index has risen 31.5% This seems like an enormous difference to me; a dismal failure to actually track the index. Am I being naive? M&G's explanation is "the fund's performance was behind that if the index due to a timing differerential. The index is priced at the end of the day, whilst the fund is priced at 12 noon".



On a more positive side the managed M&G European Fund has risen only 18.9% in 5 years so this could have been worse!



any thoughts?



Davy


It is a large difference. How much is taken up by charges ? Do you receive dividend and is the index a total return index (dividends are rolled up) ? I'm slightly suspicious when I see funds donated with 'A' or 'B' as that sometimes indicates different commission rates.

Compare it here

and here

Info. here

Exchange Traded Funds (ETF) are a cheaper way of tracking indexes, and pay dividends where applicable -

Given that indexes beat the majority of fund managers and high income strategies beat other strategies, I use the iShares FTSE Dividend + ETF

hth

Daytona

In message , Daytona writes

Hey! I know this is an old topic but if you strip out all those funds managers that manage stuff that don't intend to perform like a particular index, i.e. funds investing in other countries, low risk 'balanced' and 'managed' funds, fixed interest, property funds, and exclude anything managed by a bank or insurance company, i.e. just stick with recognised quality fund managers, then you reduce the number of funds that you are likely to use to just a few consistently performing funds. Invest in a couple with some negative correlation and not only will fund beat the indices but the risk can be reduced as well.

I agree, decent income funds give a better total return at the moment, although investing for value isnt always the best, but it is my preference.

Have a look at the funds I have been mentioning here for 10 years, Invesco Perpetual Income, Jupiter Income, etc.,

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