Fund of funds with Keith Mclachlan

Fund of funds are the Russian nesting dolls of investment. When you strip away all the layers, are you left with fees or profit? In the second episode of The Fat Wallet Show, Simon and I bedevil industry boytjie* and small caps fund manager Keith Mclachlan about these products.

Keith reckons the collective investment scheme tax shuffle, institutional fee efficiency and access to products not ordinarily available to retail investors make funds of funds worthwhile. He has a point, until he starts talking about “fuzzy logic” (which, I’m pretty sure, is a type of washing machine setting) and how you have to trust the fund manager.

Is there a person in the world that I trust enough not to fleece me on fees and to make decisions that will benefit me and not him? Haha! Yeah, right.

There is a moment right in the middle when we all go really quiet to process everything. Not great radio-ing, I know, but sometimes the brain needs a while to catch up to the information. We recorded this episode at the JSE right before Keith did a very enlightening presentation on buying small caps. He talks about the process of selecting a good stock that will be valuable to any investor. It’s worth a watch here.

* I once called him something way worse in a poker game. I know he’ll forgive me.