
This is Money Podcast Should you swap your star fund manager for a cheap tracker?
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Jan 16, 2026 Star fund managers face tough times as many investors consider ditching them for low-cost trackers. Terry Smith and Nick Train defend their recent underperformance, sparking a debate about the future of active management. The team discusses the implications of the Chancellor's cash ISA limit changes and the unexpected drop in London's property prices. They also explore whether cashback deals are worth the effort and handpick the best budget electric vehicles. Tune in for insights into investment strategies and market trends!
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Concentration In Market Harms Active Managers
- Active fund managers struggle when a few mega-cap stocks dominate the market and drive returns.
- If you don't hold those giants, you risk underperforming broad market trackers significantly.
Star Managers' Five-Year Pain
- Terry Smith and Nick Train have long records of outperformance but have underperformed over the past five years.
- That recent underperformance creates a real opportunity cost versus cheap trackers for investors.
Rates Make Dividend Stocks Less Attractive
- Rising interest rates and safer yields on bonds reduce demand for income-focused 'quality' stocks.
- That shift has depressed prices of traditionally stable dividend-paying companies.
