Having an investment manager who knows life before the current bull market is a likely benefit.
Half of all investment trusts have had at least one manager in place for 10 years or more, according to data from Association of Investment Companies. Meanwhile, a quarter of trusts have a manager with over 20 years of experience under his or her belt.
Commenting on the data, Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC) said: ‘When it comes to investing for the long term, investment companies are an ideal vehicle for investors to consider. As a result, it’s perhaps unsurprising that investment company managers are in it for the long haul.’
The longevity of managers is important for investors, particularly in the current financial climate. Over the past decade global equities have been in a unique environment. Equity prices have enjoyed a 10-year long bull market while central bank policy, in the form of historically low interest rates and quantitative easing, has provided unprecedented levels of liquidity.
Having an investment manager who knows life before all of this is a likely benefit, particularly as monetary policy starts to tighten and the bull market begins to run out of steam (whenever that will be).
Experience, it is hoped, will also help managers navigate more unprecedented events. Brodie-Smith notes: ‘With the uncertainty surrounding Brexit, it’s really encouraging to see that half of investment companies have the benefit of the same manager, who will have weathered the good times and the bad.’
Research recently published Money Observer showed that the median time spent in the job as a, open-end fund manager was seven years, meaning the median fund manager has never known a bear market, a recession or tightening of monetary policy.