Imagine you owned a football team. Would you feel more confident creating a winning side if you had a top manager to plan your tactics, organise your squad and buy and sell the right players?
There’s a value to real expertise. It’s true of football, and it’s also true of investing. One of the advantages of investing through a collective fund rather than buying and selling individual shares, is that you are effectively pooling your money with others. This means you get to invest in a broader range of investments, and it also means that you can afford the services of an expert, who manages those investments full-time. This is your ‘fund manager’, and their job is to meet the fund’s objectives, invest in what they say they will, monitor performance, reduce risk and loss, and attempt to beat the market in providing the best returns possible.