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Nov 07

Macquarie is the only gutsy fund manager

Macquarie have a series of managed funds whereby they guarantee the index return, for whichever asset class, to the investor with an ongoing MER of zero. This series of funds is called their true index series. What Macquarie is saying and doing is that they have the ability to outperform the index after costs and they make money from whatever outperformance they can generate. The investor is effectively taking on counterparty risk of Macquarie.

There are so many fund managers out there who claim that their method of active management is the best, will outperform by x% or whatever…my challenge to them is to put their money where their mouth is just like Macquarie has. If their active management method style is so good, then give me a guaranteed return of their index (say ASX200 Accumulation Index) plus 10bps (no point matching Macquarie..may as well better them) and watch the money flow in. Active managers struggle to outperform the index over the long term but for those managers that reckon they’re so good….this challenge will guarantee outperformance of the index every year…as long as they stay solvent.

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