Active Vs Passive Investing in South Africa

supersunbird

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#81
When the fees for South African passive funds become as low as those in the USA and they have a tracking error of closer to zero you can rest your case.
As far as asset allocation goes, the active manager needs to do that bit.
Why? If they are already performing on par with the big managed funds with their flaws, it will only get better if they do.
 

Pegasus

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#88
Do we have the research that says how much they do or don't?
The research that you can find on money web and wherever will say that 80% of active managers don't beat their benchmark net of fees.
SA Passive managers are missing their benchmark by 0.8% or higher due to fees and tracking error. US managers will generally be less than 0.1% behind.

So over a few years a gap will develop.
 

Pegasus

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#91
Yeah well, we can't let the "managed funds are best, you get that outperformance you pay for" crowds utterings go uncontested...
I'm saying that in South Africa, the performance gap between active and passive is smaller than in the US due to the SA active managers charging higher fees.
In the US if you pay over 0.1% it's expensive, whereas here the passive guys charge at least 0.8 % a year.

Does that not make sense?

I'm not saying active is better than passive.
Only as far as asset allocation goes will active be better.
 

Hamster

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#93
Yes, but right now sygnia, satirix et all are not beating 80% of the active managers like the US passive funds do.
Borderline "timing the market" talk. Zoom out of your performance graph and have a look over 10 years. This is investing after all, not trading.
 

Pegasus

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#94
Borderline "timing the market" talk. Zoom out of your performance graph and have a look over 10 years. This is investing after all, not trading.
I'm not talking about timing the market at all.

I'm talking about the fees that the South African passive managers are charging.
 

Eti1

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#95
I'm not talking about timing the market at all.

I'm talking about the fees that the South African passive managers are charging.
I don't think anyone will disagree, fees can always be cheaper. The active managers should slice their fees too though.
 

supersunbird

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#96
I'm saying that in South Africa, the performance gap between active and passive is smaller than in the US due to the SA active managers charging higher fees.
In the US if you pay over 0.1% it's expensive, whereas here the passive guys charge at least 0.8 % a year.

Does that not make sense?

I'm not saying active is better than passive.
Only as far as asset allocation goes will active be better.
I wasn't even talking to you or about you... :erm:

We ain't got no beef that I can see, you just saying index fund are not as efficient as they can be (not that the active managers in the regulation 28 space are beating the lights out of the index funds from what I can see over the last 2 years, when their skills are supposed to shine)
 

Pegasus

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#97
I wasn't even talking to you or about you... :erm:

We ain't got no beef that I can see, you just saying index fund are not as efficient as they can be (not that the active managers in the regulation 28 space are beating the lights out of the index funds from what I can see over the last 2 years, when their skills are supposed to shine)
As far as balanced funds go, asset allocation is key. I'll take notice of the passive funds once they start beating Allan gray.
I'm happy to pay their 1.45% fee.
 

supersunbird

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#98
As far as balanced funds go, asset allocation is key. I'll take notice of the passive funds once they start beating Allan gray.
I'm happy to pay their 1.45% fee.
Would be nice if one could compare fully, unless their redo their website performance or the balanced fund fact sheet one can't compare AG 2015 and 2016 performance against Sygnia or Coro since they don't even list it like that.

At best one can compare 1 year annualised (can't do 2 since not all list that, but lets do 1 year:
AG - 1.5%
Coro - 0.9%
10X - 1.2%
Sygnia - -0.3%

Lets do 3 years too:
AG - 8.3%
Coro - 6.5%
10X - 7.3%
Sygnia - 7.9%

And 5 Years:
AG - 12.9%
Coro - 12.8%
10X - 13.3%
Sygnia - 13.6%

Interesting, that 5 year one... are you starting to take notice?

Cant do 7 years cause Sygnia isn't that old, only 10X lists that and AG and Coro jump to 10. Can't do 10 years cause only the managed funds are old enough.
 

Pegasus

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#99
Would be nice if one could compare fully, unless their redo their website performance or the balanced fund fact sheet one can't compare AG 2015 and 2016 performance against Sygnia or Coro since they don't even list it like that.

At best one can compare 1 year annualised (can't do 2 since not all list that, but lets do 1 year:
AG - 1.5%
Coro - 0.9%
10X - 1.2%
Sygnia - -0.3%

Lets do 3 years too:
AG - 8.3%
Coro - 6.5%
10X - 7.3%
Sygnia - 7.9%

And 5 Years:
AG - 12.9%
Coro - 12.8%
10X - 13.3%
Sygnia - 13.6%

Interesting, that 5 year one... are you starting to take notice?

Cant do 7 years cause Sygnia isn't that old, only 10X lists that and AG and Coro jump to 10. Can't do 10 years cause only the managed funds are old enough.
Are those numbers net of fees and including income?

Maybe someone with access to Morningstar or IRESS can pull some numbers for us.
 
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