Archive for November, 2011



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The world is more global than ever.

We are told that our economy is in good shape, government debt is low, we are in the right place on the map (Asia); and have an excellent outlook because we will be direct beneficiaries of a longer than predicted commodities boom.

Yet our market doesn’t seem to care.

It is more global than ever. If bad things happen overnight in Europe or the US …. then our market reacts as if we are sitting on their doorstep.  If they go up …. then often we follow.

Frustrating, but we need to get used to it because that’s the way markets are now intertwined.

On another note, Georgie’s Blog has also gone global in that I’ve taken extended leave until mid January.

You may get an occasional blog during this time, however regular weekly blogs will most likely continue in February 2012.

For those who wish to follow my global travels, I have just launched a new website today which will include a regular update, and provide an insight into another passion of mine …. the world of adventure.

You can get to that website via this link .

 (For those needing expert advice; Simon, Russell, Gary, Sandra and Maria are available for immediate contact, and I will be keeping in touch via satellite phone for any urgent requirements)

 Safe travels

 Mark ‘Georgie’ George


Zombie Funds

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Zombie funds are a major problem for unsuspecting investors.

Essentially they are a dead (or ‘closed’) fund given a semblance of life by its fund manager, but they are soul-less.

Typically zombie funds can have:

  • High fees
  • Under performance;
  • Low funds under management so they get neglected; and
  • Limited flexibility.

And there are literally thousands of them.

When I last checked the Morningstar’s database of 11,000 funds, it uncovered about 3,000 closed funds.

What’s more alarming, was that close to two thirds (62.71%) of these funds were $10 million or less; with 52.12% being smaller than $5 million.  Not zombie funds yet – but how cost effective and well managed are they?

Unsure if you (or your family members) have a zombie fund?  Well ask an expert or visit for a free appraisal.


The Melbourne Cup

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Well it stopped the nation; and it also stopped the delivery of your Tuesday blog for 24 hours.

With around $100 million bet on the race, that means there were lots of people trying to pick the winner by doing ‘the form’.

But can we relate picking a winner at the horses to trying to pick who the best fund manager will be for the next 12 months?

  • The trainers would be the economists
  • The jockeys would be the fund managers
  • The horses would be ‘the market’
  • The tipping experts would be the researchers
  • And the form guide would be the historical returns

The horses with the best form are often the favourites.  The fund managers with the best historical returns are often the most popular and also gather the most inflows.

But as with Americain, the favourites don’t always win.

Portfolio Planners have reviewed the performance of some past fund manager ‘favourites’, and also found similar outcomes, eg.

  Top Performing Funds 1 Year Rank 1 Year Rank Following Year
1995 Colonial Managed Growth Fund 1 of 63 58 of 68
1996 Mullens – Investment Fund 1 of 68 79 of 81
1997 Tyndall – Equity Performance No. 3 1 of 81 57 of 85
1998 Challenger Aust Share Income 2 of 85 89 of 91


We could go on but hopefully you get the point.

Trying to pick the best fund manager based on past performance can be as difficult as trying to pick the horse with the best form as the winner of the Melbourne Cup.

Using an ‘enhanced asset class’ approach provides an excellent alternative.