According to T Bailey, the Nottingham based fund of fund manager, investors are better off being in the wrong fund in the best performing sector than the right fund in a poorer performing sector.  Or, put another way, your asset allocation will have a much greater impact on your returns than choosing the ‘best’ manager.

This will come as no surprise to anyone who has even a passing acquaintance to investment theory.  Even if all you do is check out a list of the twenty best performing funds over the last year, you will be struck by the fact that they all come from the same sector, be it China or Fixed Interest.  The sector of choice will, of course, change over time but more often than not there will be a flavour of the month.

It is slightly odd for an active fund manager to publish research which rather undermines part of their role but it does generate publicity and perhaps it is true, even in the world of finance that there is no such thing as bad publicity.

For many investors, it is always useful to be reminded from where investment returns come.  Get an asset allocation suitable for your needs and you are ninety percent of the way to successful investing.