A friend of mine works at this 2xIdeas company that creates funds aiming at delivering 100% return in 5-7 years. They basically follow the global MSCI ACWI Index (large and mid caps) and use a Warren Buffet style approach to identify the 400 best companies from the 4000 mid to large Cap companies. Then they select 100 stocks for the fund that should help outperform the index. Every quarter they review the fundamentals and tweak the allocations a bit. So far the (short) track record since looks good.
They transparently communicate why they do what and they are long only. They are fully aware of the fact that Tesla investors made a killing in 2020 and yet they believe in the long-term returns of solid companies. To me it sounds like the boring VTI/VWRL portfolio but better.
Why hang in there with companies who are past their prime when you can weed out the ones that don’t have what it takes and focus on the good ones in a way that offers the same risk profile as if you had invested in VTI/VWRL? 1% TER sound expensive to us but I kinda like the approach. They have outperformed the MSCI ACWI index by almost 9% for the last 6 years.
On the downside I think it is a bad time to get involved now. I feel the peak is approaching. And 1% TER is high. If these guys are confident in what they are doing, they would charge only 0.5% and take their margin whenever they do their over-performance magic. What do you think about it? Snake oil or real deal? 2Xideas Library Fund