How do I tell good managed funds from bad ones?

Having recently graduated from uni and landed a nice engineering position I've come to the situation where I'm still living at home and have lots of excess money (I know **** situation to be in hey)

The girlfriend and I just brought an investment property, and planning to buy our second one in 12 months time.

I want to put some money towards shares but at the moment I'm not comfortable in investing myself, will maybe do it myself in a year or so.

So I'm thinking about getting a margin loan and investing with a managed fund and then adding say $200 a week to it from my salary.

Now just searching the net there seems to be a plethora of managed funds all touting great returns. Who am I to believe? how do I tell the good ones from the band ones?

For example I was looking at wilsonHTM.

Paul24 said:

Having recently graduated from uni and landed a nice engineering position I've come to the situation where I'm still living at home and have lots of excess money (I know **** situation to be in hey)

The girlfriend and I just brought an investment property, and planning to buy our second one in 12 months time.

I want to put some money towards shares but at the moment I'm not comfortable in investing myself, will maybe do it myself in a year or so.

So I'm thinking about getting a margin loan and investing with a managed fund and then adding say $200 a week to it from my salary.

Now just searching the net there seems to be a plethora of managed funds all touting great returns. Who am I to believe? how do I tell the good ones from the band ones?

For example I was looking at wilsonHTM.

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*Grumbles - Rant mode engaged*

Ok Paul let us say that you own an investment property outright that you manage yourself. Currently there is nothing between you and the asset. You joyfully collect all the cash flows and reap all the benefits from owning that asset. You also assume the responsibility for managing that asset (collecting the rent, mowing the lawns, performing maintenence etc).

A little while later you can't be bothered in going to the effort of collecting the rent yourself, so you decide to use an agent to act on your behalf. Now there is someone between you and the asset who collects a wage for acting on your behalf so you do not receive all the cashflow.

A bit later the Agent hires a gardener to mow the lawns so you don't have to do it anymore. Now there are two people between you and the cashflows of the asset so you receive a bit less again by paying the gardeners wages as well.

It's the same story with a managed fund. You own a portion of a fund and the fund owns a suite of assets that it holds directly. Between you and the benefits of owning those assets however are all the people that need to be paid, and all the expenses that need to be met before you receive your return. These wages and expenses can add up very quickly indeed. Pay the wages of your fund manager, his administration staff, his building costs, advertising expenses etc etc etc the list goes on. Managed Funds also have a clause that enables them to charge the MER (Managed Expense Ratio) after all other expenses have been met, and no matter what the level of return of the fund.

You therefore as the client assume a much more significant level of risk than the Issuer of the Managed Fund. To beat the market level of return the fund manager must perform at a level that exceeds the market level of return enough to cover all the other expenses and still grow. Teh majority of fund managers are not able to do this. In a Price Waterhouse Cooper report from 2006 (I think) commissioned by the Government the effective level of return from managed funds across the industry was a whopping real level of return of 1% pa.

Paul as you can probably tell managed funds are not my favourite investment vehicle, because I have seen in my professional career too many times where owning managed funds has been significantly value destroying for clients. Adding a Margin Lending facility to the equation also adds an element of risk that you may or may not appreciate at this time. Please do not take this statement however as advice and seek in this order, Education in relation to the asset classes you wish to invest in and independent professional advice. Caveat Emptor however that a great many Financial Advisers are parasites IMO.

Good Luck

Cheers

Sir O

Theres only one good managed fund...

A self managed fund... the rest are a bunch of bean-counters who are clueless.

Me personally i would suggest you sit back for a while on property, you have done well i assume and sold your property but i would deffinetly not rush back in just yet.

I should also add that i recently sold my property's in Melbourne due to a lack of confidence going forward so i'm not just saying something that i have not done myself.

If your looking at shares, i would not touch financial or mining shares(although that proberbly goes beyond popular belief) i would be looking at energy(even alternative energy) stocks and food/agriculture stocks.

You should also look at alocating a % of your assets into precious metals eg. gold/silver(physical bullion)

To me it sounds like your planning allot ahead but i would suggest you take the back seat for abit and just watch what is going on in the world stage right now with currency's and money printing and make your own decision.

Don't jump into anything right now unless you do lots of research.

Sir Osisofliver said:

It's the same story with a managed fund. You own a portion of a fund and the fund owns a suite of assets that it holds directly. Between you and the benefits of owning those assets however are all the people that need to be paid, and all the expenses that need to be met before you receive your return. These wages and expenses can add up very quickly indeed. Pay the wages of your fund manager, his administration staff, his building costs, advertising expenses etc etc etc the list goes on. Managed Funds also have a clause that enables them to charge the MER (Managed Expense Ratio) after all other expenses have been met, and no matter what the level of return of the fund.

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Just a question: do you also build the house yourself? What about the electrical work and the plumbing?

Everything you say is true, but only for those long on expertise and time. If you have limited time or are not an expert, then it makes sense to engage others. Look at it this way, people are often comfortable to borrow in order to leverage their finances, why not be comfortable hiring others to leverage your TIME or EXPERTISE?

All I'm saying is that there is no one size fits all solution. Managed funds are a good solution for some and self-managed is a good solution for others, depending or experience and circumstance. As for which fund is best for you, that's a very specific question that no one here can answer. However, there is plenty of research that suggests that bigger funds tend to earn, on average, higher returns for their investors due to economies of scale.

Google Cannex.
But bear in mind that you can get > 6% on cash savings.

I understand all that completely. The fact that say one of you guys here may be able to get 15% return, if i went to a managed fund they would get 15% too but then take 4% and I only get 11%.
But the fact is at the moment if I went in myself I would probably just lose my money because I'm a complete newbee.
There is no doubt in my mind I would love to manage my own shares, but at the moment I know its not possible and with some more research in time I will be comfortable taking the reign.

You are right about sitting back and watching, with whats happening with the US and the printing it almost seems like their setting them self up for another spectacular fall.

Paul24 said:

I
There is no doubt in my mind I would love to manage my own shares, but at the moment I know its not possible and with some more research in time I will be comfortable taking the reign.

You are right about sitting back and watching, with whats happening with the US and the printing it almost seems like their setting them self up for another spectacular fall.

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OK, so why don't you use this doubtful time to educate yourself?
There's plenty of info available free. Start with the education section of the ASX website: www.asx.com.au.
Sir O has put together an excellent thread for beginners in the "Beginner's Forum". Work your way through that.

You've obviously been pretty successful so far. Don't put using the share market into some sort of esoteric, difficult category that is the province of 'experts'.

If you were to buy some shares in, e.g. Woolworths or one of the big banks (and that is not a recommendation), all you're doing is buying a small piece of that successful business. And amongst it, you'll receive as dividends a bit of the profit of that business, plus as franking credits, some of the tax that company has already paid.

Then later when you build up some confidence, you may want to go for some more speculative shares where you can make a lot more, but also risk losing more.

I agree 100% with all that Sir O has said. It takes less effort than you might imagine to educate yourself about shares. Why would you want to give money away to a Fund Manager who often doesn't even beat the index?

I'm working my way through as much text as I can.

But in the mean time, let me put a question to you.
Me, you, the guy next door, we could easily be considered reasonably intelligent and with enough research/practice/experience we could be fairly successful in the share market as something we do on the side of our normal job.

But how can you not agree that someone, who has spent the last 40 years of their life researching, studying, masters, doctorates all in financial areas, running large financial institutes, how can investing your money with them not be a better option? How could someone like me who works in a non financial job ever expect to get the same returns as the experts.

Now yes I agree with you that a lot of the so called fund managers out their could be useless, but the small percent that are truly experts in the field, how could I expect to match them?

Paul24 said:

But how can you not agree that someone, who has spent the last 40 years of their life researching, studying, masters, doctorates all in financial areas, running large financial institutes, how can investing your money with them not be a better option? How could someone like me who works in a non financial job ever expect to get the same returns as the experts.

Now yes I agree with you that a lot of the so called fund managers out their could be useless, but the small percent that are truly experts in the field, how could I expect to match them?

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There are some brilliant fund managers out there...Kerr Nielson of Platinum comes to mind, and we know he's good because he is probably Australia's wealthiest fund manager/stock picker.

http://en.wikipedia.org/wiki/Kerr_Neilson

http://www.platinum.com.au/

Now just compare what wilsonHTM does and there long term returns to what Kerr does and the Platinum funds returns and you will see the difference in both returns and investment style...actually prob not a fair comparison as Platinum just does international investing and Wilson is 100% Aussie i think.

EDIT: hey the Wilson HTM Priority Growth Fund has done pretty well...surprising, also nice to see they have PFL-Patties foods as a core (top 10) stock in there Wilson HTM Priority Core Fund (i own a few PFL shares too.)

Anyway have a look at this platinum comparison from a recent presentation and notice the out-performance at 3 yrs...Platinum the only one to actually make money during the biggest market downturn in 70 years....prob should disclose that i own a bucket load of PTM stock
~

The funds listed on the ASX also offer some reasonable returns - AFI 9.03% over five years, good liquidity - you can sell easily, no entrance or exit fees just brokerage. The MER for 0.16% and fully franked dividends, and opportunities with SPP to add to portfolio at a discount, usually once a year.
No upfront or trailing commissions to financial advisors.

I have about 20% of my share portfolio in LICs


http://www.asx.com.au/products/pdf/lmi/lmi_performance_201006.pdf

http://www.afi.com.au/

doctorj said:

Just a question: do you also build the house yourself? What about the electrical work and the plumbing?

Everything you say is true, but only for those long on expertise and time. If you have limited time or are not an expert, then it makes sense to engage others. Look at it this way, people are often comfortable to borrow in order to leverage their finances, why not be comfortable hiring others to leverage your TIME or EXPERTISE?

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the house example is not the best but works.. in this case as houses are like company's that have floated have been finished being "built"

If you are going to cut it up then you should have said :
are you going to prospect the countryside grow the wood, find and mine the iron, make the steel etc etc... but that would be inline with the fund manager creating all the companies in his fund....

IMO managed fund leg work can be done by anyone in the modern age all the information is available to the public, what they add is their "expertise" speed of execution bulk buying power, all at the participants cost.

As an educated engineer i would suggest you do the following,
List up what industries , sectors you know anything about.
Think if you want to know anything more about them if so start following companies within that interest you.
If nothing interests you think about the current economic climate and what areas in Australia you think may flourish, find an ETF or two and drop in.

Iggy_Pop said:

The funds listed on the ASX also offer some reasonable returns - AFI 9.03% over five years, good liquidity - you can sell easily, no entrance or exit fees just brokerage. The MER for 0.16% and fully franked dividends, and opportunities with SPP to add to portfolio at a discount, usually once a year.
No upfront or trailing commissions to financial advisors.

I have about 20% of my share portfolio in LICs

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You also pay for the costs of running the LIC - not sure how much this is typically but close to 1% I suspect........

Always remember that past performance is not a guarantee of future performance.

Some time ago as an investment newbie I put a lot of $ into what at the time were top performing managed funds. I ended up with massive losses when it all went wrong and decided to educate myself and make my own decisions from that point on.

It turned out that the managed funds I had invested in, were achieving high performance simply by skewing investment toward a narrow sector of the economy, thus outperforming their more broadly based rivals. When the bubble in that sector burst, so did their performance and my investments.

These days, I have some fairly simple rules. One of which is that I don't invest in anything that I do not reasonably understand.

Another one is that I don't invest in declining industries (based on my own research) where financial success depends absolutely on the specific company outperforming their peers. Management changes eventually and just because they are grabbing a larger share of an shrinking pie now, doesn't mean they will necessarily continue to do so. Maybe profitable now, but there are certainly a lot of risks ahead and little prospect of major growth unless the company actually does successfully reinvent itself in some other line of business (but do I really want to be investing without even knowing what the company's future business activities will be? That is speculative at best in my opinion).

I also like to apply my own non-financial research where possible too. I've stayed well clear of a certain retailer after noting that several of thier stores are very run down in a physical sense, to the point that I noted significant issues in one of them that were very obvious to anyone with a suitable background in the building trades (for that matter, any decent handyman would also likely notice the same problems if they were looking for them).

I'm working on the "rat theory" there - if you see one then the odds are very high that there are more, probably a lot more. All I did was walk around the store as a customer, and plenty of issues were immediately visible. A look in the ceiling space or under the floor would probably reveal a lot more problems. If they aren't even maintaing the stores in a safe condition then I can only wonder what else they might be running down in order to achieve "official" financial results. Just not worth the risk in my opinion.

So it's back to the start. Past performance is not a guarantee of future performance. The past performance might be based on a sound business, or it might be based on things which are unsustainable in the long term. I prefer to do my own research, since I don't trust others to do it for me.

noie said:

As an educated engineer i would suggest you do the following,
List up what industries , sectors you know anything about.
Think if you want to know anything more about them if so start following companies within that interest you.
If nothing interests you think about the current economic climate and what areas in Australia you think may flourish, find an ETF or two and drop in.

Click to expand...

In the variety of good advice you have recieved, I belive the above offers a good way forward for you, as many excellent investment opportunities exist on the ASX within the Resources, Mining and Engineering sectors.

By researching some well performing companies in these sectors, one often is able to see where the jobs are and identify career opportunities, as well as analysing some technical aspects.

doctorj said:

Just a question: do you also build the house yourself? What about the electrical work and the plumbing?

Click to expand...

That's kind of a long bow to draw don't you think? I think this has been answered. I started with a simple property example because Paul said he owned property and I wanted to build on what he knew.

All I'm saying is that there is no one size fits all solution. Managed funds are a good solution for some and self-managed is a good solution for others, depending or experience and circumstance. As for which fund is best for you, that's a very specific question that no one here can answer. However, there is plenty of research that suggests that bigger funds tend to earn, on average, higher returns for their investors due to economies of scale.

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1) My exerience tells me differently. Where people are invested in a suite of managed funds I am yet to find an example where they are ahead of the game. (with the possible except of an index fund - in which you are just paying some monkey to match the index - hardly requiring "expertise" my ten year old could do that IMO.)

2) Can I get the source for your statement that that bigger funds on average make higher returns due to economies of scale please? There is a whole branch of behavioural economics that talks about all the problems that are unique to large scale operations which would seem to counter your statement.

Paul24 said:

I understand all that completely. The fact that say one of you guys here may be able to get 15% return, if i went to a managed fund they would get 15% too but then take 4% and I only get 11%.

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Um Paul what makes you think that they ONLY take 4%. Also don't forget those times when the market goes backwards. Where we might lose 15%, they will add 4% ON TOP of your losses to make 19%. (which then means they need to make MORE money during the good times before you are back to where you could have been).

If you would like to learn more about this research sensitivity analysis. A simple 1% sensitivity analysis (1% negative compounding effect) over long periods of time can result in 30-40% differences to your level of return.

I'm working my way through as much text as I can.

But in the mean time, let me put a question to you.
Me, you, the guy next door, we could easily be considered reasonably intelligent and with enough research/practice/experience we could be fairly successful in the share market as something we do on the side of our normal job.

But how can you not agree that someone, who has spent the last 40 years of their life researching, studying, masters, doctorates all in financial areas, running large financial institutes, how can investing your money with them not be a better option? How could someone like me who works in a non financial job ever expect to get the same returns as the experts.

Click to expand...

Let me answer with a question. How could these same individuals not have seen the global financial crisis coming? OK sure a great many people within the industry saw that we had a very mature share market. So if they are so good, and did see it coming, why didn't they take clients funds out?

The industry is set up to have money in the system. Without money in the system, it's like a car with no petrol in the tank. You're broken down by the side of the road. Lets say you have a model bank or brokerage house that advises all its clients to exit before the big crash comes. This corrective pattern in Australia lasted between Nov 2007 and March 2009. The average business could last a couple of months with no cash-flow before going bankrupt. Very VERY quickly that ethical model brokerage house or bank goes out of business. Can you see where this is going? In many cases it is not the fault of the adviser, they are simply doing what they are told and what they are told to do is value destroying to the client.

I'll also let you know that there are two main forms of risk. Systematic risk and unsystematic (or diversifiable) risk. Systematic risk is the risk represented by the volatility of the market. Market crashes are expressions of Systematic risk. There is only one way to eliminate systematic risk. You must hedge your portfolio. To do so is not without considerable expense. Now go research how many managed funds use hedging to remove systematic risk in times of market downturn. I'll just wait here whilst you research several thousand products to discover that almost every single managed fund out there do not even have the ability to do such an activity. It's not part of their charter.

Now yes I agree with you that a lot of the so called fund managers out their could be useless, but the small percent that are truly experts in the field, how could I expect to match them?

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Last thing to add, this post is getting too wordy. Do you want high risk and high reward, or low risk and a lower reward? You have touched on an area of risk management. Risk management is a personal topic. Only you can tell me what your tolerance to risk is. When you are talking about the true experts in the field you are talking about a person who is likely to have a vastly different approach to risk than you. Managing your risk appropriately is one of the things that distiguishes professionals from amatuers. Here is the big secret. It's not hard to learn how to do it.

Cheers

Sir O

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I would agree with most comments here, take the time to educate yourself and buy your own shares, if you aren't too sure what shares to buy you could always just buy something like Vanguard (not a recommendation) Managed funds can be hit and miss and what was good last year might not be the same the following year.

Surprised nobody mentioned this site: http://www.morningstar.com.au

Managed funds can be useful however, if you are trying to get into different markets, eg buying shares in China or something like that which you might not be able to do directly but a managed fund can do it for you.

Sir Osisofliver said:

Let me answer with a question. How could these same individuals not have seen the global financial crisis coming? OK sure a great many people within the industry saw that we had a very mature share market. So if they are so good, and did see it coming, why didn't they take clients funds out?

The industry is set up to have money in the system. Without money in the system, it's like a car with no petrol in the tank. You're broken down by the side of the road. Lets say you have a model bank or brokerage house that advises all its clients to exit before the big crash comes. This corrective pattern in Australia lasted between Nov 2007 and March 2009. The average business could last a couple of months with no cash-flow before going bankrupt. Very VERY quickly that ethical model brokerage house or bank goes out of business. Can you see where this is going? In many cases it is not the fault of the adviser, they are simply doing what they are told and what they are told to do is value destroying to the client.

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Hallelujah!!! Exactly so.
Why on earth don't more stupid clients of managed funds recognise this?
All the sheep just swallowed the admonitions of advisers everywhere to "just hang in there, it will all be OK," when they should have taken preventative measures before losing around 50% of their p/f's.

Sometimes I just can't believe the incredible naivete of people who listen to popular 'advisers' without considering that these people have their own very, very important agenda as a driver.

Sir Osisofliver said:

That's kind of a long bow to draw don't you think? I think this has been answered. I started with a simple property example because Paul said he owned property and I wanted to build on what he knew.

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OK, fair enough. I doubt that we’re ever going to agree on this – you believe that it’s always best to invest in assets directly and I believe that funds (private equity, index funds, hedge funds etc etc) offer some advantages that may benefit individuals, depending on their circumstances.

For the record, I invest professionally, but hold my personal holdings directly. Each has its own benefits. Why don’t I invest personally in the funds we invest? Mainly because I can’t – we manage our own funds.

Sir Osisofliver said:

1) My exerience tells me differently. Where people are invested in a suite of managed funds I am yet to find an example where they are ahead of the game. (with the possible except of an index fund - in which you are just paying some monkey to match the index - hardly requiring "expertise" my ten year old could do that IMO.)

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I know plenty of funds that make their investors plenty of money, but anecdotal evidence or specific examples won’t really prove anything. Here’s a paper written by University of Chicago’s Booth School of Business that shows that fund managers can/do have a statistical edge over the markets. There are other similar reports I can share from MIT etc, but I don’t have them to hand.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1477586

Sir Osisofliver said:

2) Can I get the source for your statement that that bigger funds on average make higher returns due to economies of scale please? There is a whole branch of behavioural economics that talks about all the problems that are unique to large scale operations which would seem to counter your statement.

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I was referring to a Morningstar report published around the time of my post – I don’t have it to hand, but you should be able to find it on their website.

Sir Osisofliver said:

Let me answer with a question. How could these same individuals not have seen the global financial crisis coming? OK sure a great many people within the industry saw that we had a very mature share market. So if they are so good, and did see it coming, why didn't they take clients funds out?

Click to expand...

Investors are not fortune tellers. Without risk there is no profit. Many funds did make profit (or at least lose less than the market) at the height of the crisis – the obvious example here is Taleb who made a stack for his fund. Other funds did lose money, but most have also recovered exceptionally well. One of the largest asset managers in the world (can’t say who, but they manage several billion) had their best month on record in September and are well up on the year, despite global markets being relatively flat.

Sir Osisofliver said:

The industry is set up to have money in the system. Without money in the system, it's like a car with no petrol in the tank. You're broken down by the side of the road. Lets say you have a model bank or brokerage house that advises all its clients to exit before the big crash comes. This corrective pattern in Australia lasted between Nov 2007 and March 2009. The average business could last a couple of months with no cash-flow before going bankrupt. Very VERY quickly that ethical model brokerage house or bank goes out of business. Can you see where this is going? In many cases it is not the fault of the adviser, they are simply doing what they are told and what they are told to do is value destroying to the client.

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Not sure about this example – banks make money on the buy side, on the sell side, for advisory etc etc. But I thought we were discussing fund managers anyway? Yes, fund managers will go bust if they can’t raise monies for new funds, but funds tend to be 3-5 years or longer, so not investing the funds at their disposal in the short term won’t put them out of a job. The main thing that will impact their ability to raise funds in the future is the returns of their previous funds.

Sir Osisofliver said:

I'll also let you know that there are two main forms of risk. Systematic risk and unsystematic (or diversifiable) risk. Systematic risk is the risk represented by the volatility of the market. Market crashes are expressions of Systematic risk. There is only one way to eliminate systematic risk. You must hedge your portfolio. To do so is not without considerable expense. Now go research how many managed funds use hedging to remove systematic risk in times of market downturn. I'll just wait here whilst you research several thousand products to discover that almost every single managed fund out there do not even have the ability to do such an activity. It's not part of their charter.

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How can an individual hedge better than a fund? I guess what you’re asking is can a fund generate alpha returns – there’s plenty of research both ways on this, but take a look at : http://www.create-research.co.uk/pubRes/exploituncert/downloadreport.html

Julia said:

Hallelujah!!! Exactly so.

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Julia said:

Why on earth don't more stupid clients of managed funds recognise this?
All the sheep just swallowed the admonitions of advisers everywhere to "just hang in there, it will all be OK," when they should have taken preventative measures before losing around 50% of their p/f's.

Sometimes I just can't believe the incredible naivete of people who listen to popular 'advisers' without considering that these people have their own very, very important agenda as a driver.

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Julia, your posts are usually quite well thought out and balanced, but I’m at a loss here. Are you talking about financial advisors or fund managers – it seems both or are you confusing the two? Many people who are a lot more successful than any of us here invest a great deal in managed funds and I highly doubt they are all ‘stupid’ or ‘sheep’.

I don’t want to come across as a crusader in favour of fund managers and I do agree that those with time/skills should consider managing their own money, but the vitriol here is absurd. The fact is that funds give people without the skills or the time a method of saving for the future. Even those comfortable in making their own investment decisions could benefit from investing a portion of their portfolio in funds – think improved diversification, access to different asset classes (international debt/equity, emerging markets, private equity etc) or industry sectors (e.g. someone down the board said that as an engineer, they like to focus on that sector. I’m sure most would agree this is a good strategy, but what if engineering goes through a cyclical downturn?) etc

doctorj said:

Julia, your posts are usually quite well thought out and balanced, but I’m at a loss here. Are you talking about financial advisors or fund managers – it seems both or are you confusing the two?

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Sorry if I was unnecessarily vehement in my support of Sir O's remarks, but it's something about which I feel strongly. I'm just tired of hearing people say how much they are down in their Super and other managed funds since the GFC.

Many people who are a lot more successful than any of us here invest a great deal in managed funds and I highly doubt they are all ‘stupid’ or ‘sheep’.

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No, perhaps not, but many simply are too lazy or uninterested to educate themselves financially.
I'm not sure how you'd know that 'many people investing in managed funds are a lot more successful than any of us here?
You've chided me for rhetoric, and I will do the same in return over this statement.

I don’t want to come across as a crusader in favour of fund managers and I do agree that those with time/skills should consider managing their own money, but the vitriol here is absurd. The fact is that funds give people without the skills or the time a method of saving for the future.

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Agree that the principle of ensuring people put money aside for the future is absolutely necessary. What I'm questioning is that professional fund managers necessarily do better than individual investors who take the trouble to educate themselves and then devote reasonable time to looking after their investments.

Even those comfortable in making their own investment decisions could benefit from investing a portion of their portfolio in funds – think improved diversification, access to different asset classes (international debt/equity, emerging markets, private equity etc) or industry sectors (e.g. someone down the board said that as an engineer, they like to focus on that sector. I’m sure most would agree this is a good strategy, but what if engineering goes through a cyclical downturn?) etc

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Well, that's a matter of opinion. Diversification doesn't necessarily reap better rewards. Personally, I'd rather put more into a sector that's running well, go with that trend, and then exit when it falls from favour.