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Off-the-peg income

Off-the-peg income
January 16, 2014
Off-the-peg income

That, of course, is a side swipe at those fund managers and stock-pickers who make great claims for their research; perhaps for their obsessively-detailed '300-point' stock-screening exercise; maybe for their 25-stage safety checks, which claim to eliminate all but six-sigma events; or for their voracious appetite to consume company annual reports, which is not sated by reading even 50 a day. Or whatever. But the sad truth is that in an equity market such as London's, pretty well all the quoted companies - certainly all the larger ones - are so fully worked over that there is limited benefit to be gained from large amounts of additional research. Conversely, stock selection based on some simple rules is likely to do just as well as more complex efforts.

Hence this instant-income fund, which is a practical response to a question raised here last week: how do you start up a high-yield equity portfolio from scratch in today's environment of ultra-low interest rates?

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