Pie funds

[Harvey Specter]

Call me a cynic but I also think the donation of fees to charity this month is designed to deflect attention from the funds performance.

Maybe a bit cynical. They were very public awhile ago donating to kidscan on the Cambell Live show. Given his funds are all effectively full, there is no real need for him to do marketing so I think he has a real charitable nature.

[bull....]

This is why index funds are recommended over active funds. Lower fees, and the index beats out the majority of active fund managers (which is to be expected as an index automatically dumps losers and adds winners, so you are always on the right side of the rebalancing).

Sure during a bull market, but in any other market active managers may do better.

Pie funds I believe may be one of the best performing managers over the last 5 yrs but like I say lets see amoung all the fund managers when it ends

Good markets since end 2008 make most of us look like gurus, when the party ends we will see the real gurus! quote by bull

[Bilbo]

This is why index funds are recommended over active funds. Lower fees, and the index beats out the majority of active fund managers (which is to be expected as an index automatically dumps losers and adds winners, so you are always on the right side of the rebalancing).

Wow, very broad generalization there. PIE funds have smashed the indexes, Milford are well ahead too. Saying index funds are recommended over active funds is way too simplistic. The key is asset allocation. If you are in the wrong indexes then you might outperform an active manager in a fund for that asset class/subclass, but you most likely will not outperform a skilled active manager that is investing across different asset classes/subclasses and actively adjusting exposure to asset classes, geographic regions, FX etc. The key is picking the right manager. I use both PIE and Milford and am very happy, but they only manage <20% of my holdings as their NZ/AU focused funds invest in a small part of the investment universe.

Here is a counter argument to you sating "an index automatically dumps losers and adds winners". Look at when XRO was added to the MSCI global index, most of the index funds tracking that index bought at $35+ and will now need to sell at half that when/if XRO drops from the index this month (an will also have an FX loss too as the NZD has fallen >10% since then). The smart active managers (e.g Milford) bought XRO at $1-$4 well before it appeared in any index, and have sold down after it was bought by index tracking funds at 10+ times the price. PIE Funds are a small cap specialists and will be buying future winners well before they are large enough to enter most indexes.

[Harvey Specter]

Call me a cynic but I also think the donation of fees to charity this month is designed to deflect attention from the funds performance.

I also note that they did well at the Fast 50 awards* last night with Revenue up over 1000%.

* not a fan of the Fast 50's as it focuses only on revenue and favours small companies - 25 of the 50 have revenues under $5m

[ruaboy]

I have held both index and managed funds. According to my very rough records 100k invested in MZY, OZY and Pie's AGF in 2007 has been turned into MZY 77k, OZY 120k and Pie's AGF 351k. No dividends included in this very simple calculation. I no longer hold index funds and am a very happy Pie holder.

[Bilbo]

The difference is that XRO would make up a miniscule % of the total index (<1%) so any loss from the entry/exit would not be noticeable. An active manager who is a substantial shareholder may well have 5-7% of the portfolio in XRO. The losses are of a much greater magnitude. In order for an active manager to outperform an index with several hundred components they would have to take bigger bets and BE ALWAYS RIGHT. Which they are not.

Yes of course XRO is a minuscule % of the total index, but how many other stocks in that index have also been bought high and sold low by the passive manager being required to follow the index? But I know I can not argue with a passive index convert so will not waste my breath. All I can speak of is personal experience, having had a large chunk of my portfolio managed by a passive manager and having totally outperformed with my own investments and with investments with (carefully selected) passive managers.

Indexes and passive managers will give you the average and for some people that is acceptable. I have been raised to not be content with being average and will always strive to far exceed the average. I pick active managers that share the same philosophy and passion for being the best, not just average. I liken passive managers to the students I went to school/university with who were happy to get 50% in an exam and that was their target. My target has always been 100%

[D. Fender]

All Pie's Australasian funds are closed.

[D. Fender]

Fortunately PIE had halved their investment in TTN before the hit. Im still happy having funds with them.

The share price halved (from a high of $3.70 down to $1.70 the day of the profit warning). 500,000 more shares in TTN were purchased earlier this year and close to 10% of the equity was still held.

[bull....]

I could never understand the holding in TTN, but then again im a person who believes no company can defy macro headwinds

[D. Fender]

Anyone else noticed they just sent out their October newsletter announcing how they have just taken a big stake in REF because its such a bargain "deep value investment" - then on the 1st of Oct a SSH notice appears detailing a 1% sell down of the stake (which followed from an earlier sell down of the stock in late August). They must be taking lessons from HotCopper in pumping while dumping!

I see the same.