I invested a fairly large proportion of my early retirement/redundancy package with Fisher at the beginning of 2010. The rationale was to get exposure to a wider range of companies than a fund focused on UK companies but not to limit the investment to just the BRICs.
I went with Fisher because at the time I did not trust myself to self select all of my equity investments. I had not invested since the mid to late 80s and had a few bad experiences at that time.
It utilises the Purisma Investment Fund, an open ended investment company based in Jersey and regulated by the Jersey Financial Services Commission. I split my investment 50/50 in one sub fund that did not provide any currency hedging and another sub fund that attempted to reduce my exposure to currency other than Sterling. The funds are designed for capital gains.
The holdings were held by Raymond James Investment Services, independent of Fisher Investments. The Fisher annual fee was set at 0.5% of the value of the funds and there was a RJIS custody fee of about £20/mo.
At the time the funds invested in the following sectors:
Consumer discretionary
Consumer staples
Energy
Financials
Healthcare
Industrials
IT
Materials (commodities)
Telecoms
Utilities
Each fund had about 140 companies mostly well known in the UK but also a few unknowns (at least to me). There were 37 countries represented and the funds were most overweight in the US, Brazil and Switzerland and most underweight in the UK, Japan and Canada versus the MSCI World (Sterling) Index, which is the benchmark Fischer uses.
At the same time I chose to invest a smaller portion of my investment pot in AIM oil stocks having worked in the oil E&P industry for many years. After about 9 months I realised that my own investment in a handful of AIM “oilies” were doing substantially better than the Fisher funds. I was up about 50% whereas one of the two funds was actually down about 7% (2.25% of which was the initial fee). I elected to withdraw about 55% of the total funds which took me well below the minimum investment amount; you require £250k to become a client. There was no problem doing so.
I retained 45% invested primarily because of weekly and quarterly commentaries that Fisher provided. The quarterly reviews contained, in my estimation, very high quality research and quantitative insights into the world’s financial situation. There was also a quarterly client portfolio valuation report.
I put the funds that had been withdrawn into existing and new AIM oil stocks and continued to achieve remarkable capital growth. By January 2011 the AIM portfolio was up over 80%. I elected to close the Fisher account despite some concern that this would mean losing the commentaries but at the time they did not appear to be directly relevant to the AIM market. Again there was no problem withdrawing the funds. There had been a strong recovery in 4Q 2010 so by the time I exited in Jan 2011 I was able to so at a very small profit of 1% after taking into account the initial fee, which was effectively about 3% due to my earlier withdrawal.
As luck would have it the markets turned in 2011 and AIM oil companies in particular suffered a big down turn in 2011. Do I regret the initial withdrawal? No, the Fisher funds are extremely large and I did not feel they were nimble enough to capture what upside there was in the first half of 2010. Do I regret closing the account? Yes, my overall investment portfolio became unbalanced and I over committed to AIM at the wrong time. Having said that I remain ahead by having invested in AIM but I am carrying greater risk going forward.
My history with them was brief but my sense is that they will deliver steady returns. I was shown a graph showing fund performance to be significantly ahead of the MSCI World Index over the period 1995 – 2009. Average annualised return was 9%, however the vast majority of the absolute returns were obtained up to 2000.
As well as the weekly and quarterly publications there is an annual client seminar with a meal and presentation by Ken Fisher and his senior analysts. They run it at lunch and dinner to provide flexibility. I also had a client advisor based in California who would ring me from time to time for a chat about the market and how things were going.
I will finish with an extract from the 4Q2010 Quarterly Review which included a discussion of the outlook for 2011.
“After two years of above-average global equity market returns, we believe 2011 will continue the bull market but with more flattish results – up a bit or maybe even down a bit. This would be typical of a bull market’s third year – which is set to begin in March. Further, we expect increasing dispersion of returns through the year with a potential change in leadership categories. (The review went on to discuss how they expected health care, utilities and consumer staples would play a more prominent role than emerging markets, commodities and energy shares in 2011.) We believe 2011 will be in many ways reminiscent of 1960, 1977, 1994, and 2005 – a pause that refreshes before the next major up-leg, and not unusual in the course of a full bull market.”
The review showed a table of 12 separate bull markets from 1932 and the S&P 500 price level return averaged +3.7% in the third 12 month period. This period finishes in early March 2012 so strictly speaking we would have to wait until then to judge the outcome. However the comments with respect to 2011 appear slightly optimistic as the Index fell about 9%, which is worse than all bar one of the 12 previous bull markets. But then many of 2011 events were unpredictable.
So in conclusion I think they are client focused, do offer a broad exposure to world markets and have consistently outperformed the MSCI World Index. It is a pity that you have to make such a large initial commitment. I wish I could read their comments on the outlook for 2012 lol!
Hope this helps,
Regards,
PW
