Twitter. Damned twitter. I wish I had never brought this social media tool into my mediocre life as if it were a lover.
For the past month, I have received a Twitter pasting for my views on active fund management (I have referred to a little of this social media bashing in past Financial Adviser columns).
They are views, I must reiterate, not an unequivocal defence of active fund management (I have been and continue to be one of its fiercest critics).
They are opinions borne out of the simple premise that both competition and choice are good for investors, whether the fund management provided is active or passive.
Here is a taster of the tweets that have come hurtling my way. I have ignored the ridiculous ones that say journalists are not needed – what utter baloney – blame the media for not being hard enough on the banks (rubbish) and suggest the fourth estate should collectively crawl under a rock, hide and never resurface (okay, let us all go and live in Russia).
Just for clarity’s sake, I have added annotations in square brackets to make sense of some of the tweets.
“Sensible investment [passive investment] is boring, media don’t do boring – it (no news) doesn’t sell papers.”
“It’s not just re ‘passive’. It is about pointing out the costs of active and the random nature of returns, not just waxing lyrical about [Neil] Woodford [Woodford Investment Management] as if he’s the answer to everything.”
“Lots of ‘star’ manager profiles [in the newspapers] and beauty parades, not enough on fees or long-term performance or academic evidence. The evidence has repeatedly shown that active funds outperform no more than you’d expect from random chance.”
“Most investors should take [Warren] Buffett’s advice and index. The public needs to know it and journos [journalists] have a duty to say it.”
Finally: “Overall, financial PR still has too much influence over [journalistic] agenda and content” and: “The UK [investment] media still dances to the industry’s tune.”
There is more but you get the gist.
According to the authors of these tweets, the financial press is beholden to both the investment funds industry and its phalanx of public relation advisers. We are also besotted with active fund management and do not give enough airing to the growing market for passive investment (now some 12 per cent of the retail investment funds industry, according to the latest statistics to emerge from the Investment Management Association).
Rubbish. Utter garbage.
Most of the tweets have emanated from journalist and broadcaster Robin Powell who runs a website called evidenceinvestor.co.uk and a company called Regis Media. He is an ardent supporter of passives. Indeed, he is such a passive disciple that he is happy for his ‘content’ to be presented by firms in their own branding. Anything goes, it seems, provided the passive gospel can be spread far and wide.