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Sensible Investing slams fund management industry

Sensible Investing TV, which produces educational content for investors, has produced a YouTube video documentary series entitled How to Win the Loser’s Game.

The series of 10 videos, produced by the not-for-profit organisation, has interviewed a series of experts, including Michael Johnson, spokesman for the Centre for Policy Studies.

During Mr Johnson’s video interview, he highlighted figures from a recent report, which found that 99 per cent of managers failed to deliver any outperformance, either in stock selection or from market timing, with researchers labelling managers as “genuinely unskilled”.

Other experts interviewed for the series include: Jack Bogle, founder of US passive giant Vanguard; Alan Miller, founder of SCM Private; and Daniel Godfrey from the Investment Management Association.

The aim of the videos is to provide ordinary investors with the information they need to achieve their investment goals. It explores the relative merits of active and passive investing, as well as so-called “smart” beta - a “middle way” approach that is gaining in popularity.

While the channel is not anti-active management per se, it aims to explore the evidence available to justify a low-cost, passive form of investing.

Robin Powell, producer of How to Win the Loser’s Game, said: “As well as investors, this documentary is compulsory viewing for journalists and politicians.

“It’s well known that we face a pensions crisis. The emphasis so far has been on the need to put more more money into our pensions. It’s true that most of us have to. But we also need to wake up to how much the industry is taking out of our savings - and how little value it’s adding in return.

“Investors - and the wider economy - would be better served by a fund management industry 20 per cent its current size.”