Past performance is not an indicator of future returns, but is a significant factor for investors

14 June 2013

  • Halifax Share Dealing surveys investors to establish what impacts their investment strategies and where they are investing

Investors now rank past performance as the most influential filter when ranking a list of funds, ahead of both dividend yield and costs, according to the latest Halifax Share Dealing Market Tracker.

Choosing funds
Despite the traditional warning that the value of investments can go down as well as up and you may get back less than you invested, nearly one third (29.6%) of retail fund investors rank past performance as the most important consideration when choosing funds

The level of importance of fees, risk and industry ratings are a perennial topic of debate when choosing a prospective fund. However while more than a quarter of investors said yield (27.3%) and 16.4% said costs (annual management charges/initial charges) were the most important filters, risk (7.5%) and industry ratings (6.0%) were significantly less popular.

Damian Stansfield, Halifax Share Dealing, comments:
"After several years of volatile market performance it is natural investors want to feel comfortable when making their investment decisions, and are attracted to funds that can demonstrate a solid track record. Nevertheless, it remains true that past performance doesn't necessarily guarantee future returns, and investors should always examine a wide range of factors when seeking to rank a list of funds.

"The results serve to highlight the importance of making the best use of all the information available to investors to inform their decisions. Halifax Share Dealing customers can access comprehensive information, news and analysis covering all aspects of investments on the site for free."

Generation Rent

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