Monte Capital Group

People

Always ask about the experience and expertise of fund managers during your initial investigations. Excessive executive or staff turnover is a red flag and deserves extra scrutiny.

Philosophy

Check that the firm has a genuine commitment to the long term, and that they have an investment philosophy with which you feel comfortable. A management team that can’t articulate its philosophy probably does not have a philosophy. In that situation, keep looking.

Process

Some firms give managers much more leeway than others. How much discretion do you want your fund manager to have?

Performance

Past performance is perhaps the least reliable predictor of future results. Investors need to consider a fund’s record in context, and ask: is recent success consistent with the firm’s general investment philosophy and process? You should also look back over the long-term performance, always comparing this with the relevant benchmarks. This is true of both index and active managers.