Conventional wisdom dictates that not all your eggs should be placed in one basket when choosing the fund manager responsible for your members' savings - as the possibility of underperformance by any single manager relative to the chosen benchmark is usually too high a risk to accept. The traditional approach to mitigate this risk is to allocate the fund across a few active managers, thereby diversifying the risk. However, this may not be the most effective method to mitigate the risk of underperformance and is certainly not the most efficient solution to reduce excessive total fund costs.1 for their three-year returns. As of June 2009, one manager remained in the top half, another was a mid-performer, while the third was near the bottom. Only one fund outperformed the FTSE/JSE Shareholder Weighted Index (SWIX) benchmark.
Our Product Development Manager, Kingsley Williams, looked at the performance of three well-known managers' funds back in 2007. All three were ranked in the top half of the Alexander Forbes survey
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