Wednesday, June 6, 2012

Black Swans vs incompetence

Chart: Investor FIZ vs PBG and WIG20, 1 year, 2012-06-05, source:

While the sudden drop in value of the UniWIBID fund may be considered caused by the Black Swan event, you cannot say the same about the recent mouth dropping 24.89% fall of Investor FIZ last month.

From its peak of 2977,05 PLN reached in October 2007, the fund collapsed by 62,34% (which is still better than the -77,85% drawdown of Opera FIZ betwen June 2007 and March 2009).

Chart: Investor FIZ performance, 2006-2012, source: Investor TFI

It is quite amazing, that the fund did actually manage quite successfully through the market turmoil of 2008-2009, although it did not benefited from the significant rally of 2009-2011:

Chart: Investors FIZ performance, 2007-2012, source:

One may blame the fund management company - Investors TFI - for losing focus while trying to diversify and expand its product portfolio, instead of  sticking with the management of its flagship fund - Investor FIZ.

Shortly after establishing a short but notable track record with Investor FIZ, Investors TFI launched first a fund investing in gold-related assets - Investor Gold FIZ (late 2006), then - another fund focusing on CEE Emerging Market assets - Investor CEE FIZ (mid 2007), and later - one investing in non public companies - Investor Private Equity FIZ (not analyzed here). 

Finally, in March 2011 (note this date) Investors TFI acquired fund management company DWS Polska.

The first of them - Investor Gold FIZ - quite successfully rode the gold bull market of 2008-2011:

Chart: Investor GOLD FIZ vs gold, 2007-2012, source:

However, for most of the time its performance was a little inferior to gold, and it diverged significantly with the metal in mid 2011.

The second fund - Investor CEE FIZ - was a disaster - it lost 61,16% since inception.

Chart: Investor CEE FIZ vs WIG20, SOFIX, BET and BUMIX, 2007-2012, source:

Yes, you can partly blame some of its performance on the unfavorable conditions on the markets it was created to invest on.

Nevertheless, when one compares the performance of the three mentioned above funds (Investor FIZ, Investor GOLD FIZ and Investor CEE FIZ), one can observe the gradual degradation of their results from mid 2011 (reminder: in March 2011, Investors TFI acquired DWS Polska):

Chart: Investors TFI funds performance, 2007-2012, source:

If not for similar performance of the other Polish absolute return investments in 2011, one could suspect the breach of the fiduciary duties by the Investors TFI, by overstretching company resources and removing critical assets and capabilities from the management of some funds in order to develop the new business.

But if it wasn't lack of due care, the results of Investors TFI's funds are simply due to lack of competences...

And I'm not sure which one is the better.

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