As an independent financial planner, we have the chance to talk with different fund managers about their views on the market and how they manage funds for clients.
In the days before Christmas, I spoke with Nick Kirrage, Co-head of the Schroder Global Recovery Fund.
As someone who believes in diversification, both in terms of asset allocation, but also investment styles, the Schroder Global Recover Fund is one of the few International true value style funds available to investors in Australia.
Nick alludes to some of the behavioral biases that influence our ability to be great investors. I’ve gone into these in a little more detail – see if you can spot these in the interview (and in your own investment thought processes)…
Confirmation bias is our tendancy to look for (or notice) information that confirms a view we already have. If you’ve ever gone to an investor conference you’ll often notice that people who are bullish on the market come away more bullish – they’ve heard all the good news that confirms their positive view. On the other hand, you’ll also see people who are cautious on the market come away from the same event with a more cautious view. This is a perfect example of ‘confirmation bias’.
It’s very normal for a person to think they are better than average and we’re very good at convincing ourselves that our decisions were good. The bad things that happen in our lives (and in our portfolios) weren’t our fault – they were random, we couldn’t see them coming, the economy went bad. the good things, well, that was because we made a great call.
Ever felt overwhelmed by the amount of information out there? Sometimes we find ourselves focusing on information which isn’t actually relevant to our decision making process. We spend hours or even days looking at information which will influence share price performance in the short term, rather than effecting long term value. This is information bias, and can lead to an investor selling great companies based on short term news flow.
Key information about the Schroder Global Recovery Fund
- International Equities portfolio
- Benchmark unaware
- Recommended as a long term holding (their average holding time is 5 years)
- Minimum investment amount (directly through the wholesale fund) $20,000
- Management fee: 1.40% per annum
- Morningstar: Not covered