Sounds a bit investment/tech/nerdy, I know. The ’60/40’ portfolio is what we call ‘Balanced’, with 60% in shares, 40% in fixed interest bonds, loans to companies and governments. The theory is that when shares go down, the money goes into bonds and they go up and balance the fall. Now if I had a fiver (would have said a £ before inflation hit again) for every time I’ve heard a new fund manager on the block say this is a thing of the past, I’d invest it all in a balanced fund. No, it doesn’t always work; but then nothing does, otherwise we’d all be millionaires and it would be easy. The thing is, it works more often than it doesn’t, which means that if you hang on in there, you will do OK and it will balance in the end. And if it’s not OK, it’s not, of course, the end yet…
“LSEG report: Most active funds are underperforming their benchmarks”
So-called ‘tracker’ or ‘passive’ funds have become very much more sophisticated in recent years, largely facilitated by technology. The originals, you may remember the Virgin UK Index Tracker, launched nearly 30 years ago, mimicked the FTSE index and, as they don’t need anyone to manage them, were and are very much cheaper than ‘active’ funds.
