Pimco is not a household name in Europe, but is one of the biggest investment managers in the world. In the past year, two high-profile members of the investment and executive team have left the firm. These departures have contributed to investors pulling money from Pimco’s funds. Investors withdrew $23.5bn from Pimco’s flagship bond fund. Yes, you read that right; $23.5bn; from one fund; in one month.
Something similar happened in the UK when the manager of one of the country’s largest funds announced that he was stepping down, prompting investors to pull £2bn out.
Both cases illustrate the faith investors are prepared to put in the individuals who look after their money when performance is good. But that special ingredient can evaporate overnight, leaving many investors with no choice but to switch to other funds.
The approach we have to managing money does not rely on any one individual, it relies on a system.
That system begins with the idea that markets will reward all patient investors over time (especially if they concentrate on the things they can control, like keeping costs low and only taking risks that reliably are rewarded) and it runs right through to the people we select to manage your money who, in the nicest possible way, are interchangeable.