A spurious preposition.
What is an index ? A fund is a group analysis en masse ergo the fund itself is not an island and separate from any scrutiny. An index is a selection by cap. The difference is in the selection process of which instrument goes into which basket. Regardless the criteria is still subject to analysis (technical or otherwise).
The selection criteria of the fund managers says much about their performance as analysts via the very selection of investment they make. Therefor as they use technical analysis for entrance and exit (as a minimum) then surely that same selection is open to technical analysis as a grouping.
An index is a group selection based on a very small criteria (usually cap base) whereas a fund is based on a mixture of technical analysis and fundamental outlook of future performance. Surely we can then judge that same fund in the same way.
I think NOT ENOUGH techincal analysis is put into the performance of the managers and this is never more obvious than the capital inlfux that arrives late into a fund that has been a hot performer (read as : booked good earnings above the consensus). The bulk of the public rarely scrutinises appropriately managment performance and generally will chase the highest number only to find they have already arrive too late for the party.
Generally, I find little to be enthused about funds (mutual, superannuitant or otherwise) as the use of funds is usually based on the lack education to invest for oneself. Leaving your investment needs to a manager that, at best, rarely outpaces the underlying index they are supposed to beat....remember that funds managers are there to get your capital and to extract fees.
Maybe calling the preposition "spurious" is a tad unfair but after (22 years of ) trading and watching funds managers show dismal returns verus the locale, largest indecies, I think one can do a lot better than to involve oneself in funds that can be beaten on regular basis. That governments have made and given the funds managemennt industry a bona fide atmosphere, by decree, does little to hide the reality that most people simply don't take responsibility for their own financial well-being. The idea that funds management may not be scrutinised by technical analysis fits into that too.
Julian
