How Does the Great Investments Programme Compare to Traditional Fund Management?

The Problem with Today’s Pension System

This article distills the core arguments behind a simple but uncomfortable truth:

Most people’s pensions are being mismanaged.

Traditional fund management has convinced investors to surrender control, pay high fees, and hope someone else is smarter than the market. Decades of evidence says otherwise.

The Great Investments Programme (GIP) was built as the antidote to that system.

Instead of asking investors to “trust the expert,” the GIP hands the evidence to them - clearly, transparently, and without the smoke and mirrors.

It is an investment framework grounded in data, not personality; transparency, not secrecy; alignment with the investor, not the fund manager.

Where the traditional industry operates behind opacity and incentives that work against the client, the GIP is designed around one principle:

If you can see it and understand it, you can control it.

Fund managers want assets under management. We want investor empowerment. That is the difference.

Key findings indicate that the vast majority of active fund managers fail to outperform their benchmarks after fees, with data from the S&P SPIVA Scorecard (2024) showing that over 85% of UK equity managers and 90% of global equity managers underperformed over a ten-year period.

In contrast, the GIP is presented as a system grounded in empirical factors, behavioural finance, and radical transparency, designed to empower investors with control and understanding.

The GIP model aims to replace the "myth of the skilled fund manager" with a disciplined, data-driven process, ultimately reframing pension management from an act of faith into an act of evidence.

The Great Investments Programme vs Traditional Fund Management.pdf

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I. The Critique of Traditional Fund Management

The source context outlines a multi-faceted critique of the conventional fund management industry, arguing that its structure and practices are detrimental to long-term investor outcomes.

The Myth of Managerial Skill and Widespread Underperformance

The long-standing notion of the "star manager" who can consistently beat the market is dismissed as a cultural myth unsupported by data.

• Empirical Evidence: The S&P SPIVA Scorecard (2024) is cited as primary evidence of systemic failure:

  • Over 85% of UK equity fund managers underperformed their benchmark over a ten-year span.

  • Over 90% of global equity fund managers underperformed their benchmark over the same period.
    

• Lack of Persistence: The ability of a manager to outperform in one period is shown to have no statistical correlation with outperformance in subsequent periods, making "alpha" indistinguishable from random chance.
  

The Detrimental Impact of Fees

High fees are identified as a primary driver of underperformance, systematically eroding investor capital over time.

• Fee Structure: Active management typically costs between 1–2% per annum.
  

• Long-Term Erosion: Over a 25-year pension horizon, this fee structure can erode up to 40% of an investor's potential capital.
  

• Value Proposition: The industry is described as delivering "index-minus-performance" while capturing significant rent from clients, representing a "triumph of marketing over mathematics."
  

Structural Flaws: Opacity and Misaligned Incentives

The industry's business model is presented as being fundamentally misaligned with client interests.

• Opacity: Fund management operates behind a "curtain of complexity," where investors rarely know their precise holdings or the risks they carry. Reports are often backward-looking and framed with selective narratives.
  

• Incentive Misalignment: The dominant business model is based on Assets Under Management (AUM), not performance. This incentivises managers and advisers to focus on client retention and asset accumulation rather than generating superior returns. This structure is said to breed inertia over excellence.

II. The Great Investments Programme (GIP) Model

The GIP is positioned as a direct solution to the identified flaws of traditional fund management, built on principles of evidence, transparency, and investor empowerment.

Evidence-Based, Algorithmic Approach

The GIP replaces the subjective judgment of a manager with a systematic framework grounded in empirical data and Nobel Prize–validated financial factors (Fama–French, Thaler, Kahneman).

• Core Selection Factors: Investment decisions are based on a set of objective metrics:

  • Quality & Growth: Identifying fundamentally strong companies.

  • Income: Sourcing reliable dividend streams.

  • Valuation: Using metrics like CROCI (Cash Return on Capital Invested), P/E, and free cash flow yield.

  • Volatility: Measured by the Sortino ratio to assess downside risk.
    

• Philosophy: The source states, "It is not a cult of personality; it is an algorithm of reason."

Radical Transparency and Investor Control

A core tenet of the GIP is complete transparency, which serves to restore the link between ownership and understanding.

• Full Disclosure: Every stock holding and the rationale behind its inclusion is disclosed.
  

• Open Architecture: The model portfolio structure (comprising Quality 5+, ETF selections, and special situation ideas) is designed for investors to verify, modify, and implement through any global brokerage platform.
  

• Empowerment: This clarity is intended to benefit the client by converting "financial dependence into informed autonomy." As Daniel Kahneman is quoted, "Transparency and accountability are the enemies of overconfidence."

III. Advanced Frameworks and Protections

Beyond its core philosophy, the GIP incorporates specific mechanisms for risk management and behavioural coaching.

Behavioural Finance Integration

The GIP is designed to protect investors from self-sabotage, identified as a significant threat to pension returns.

• The Behaviour Gap: Studies by Dalbar and Vanguard show that the average investor underperforms their own funds by 1.5–2% annually due to emotionally-driven timing decisions (buying high and selling low).
  

• GIP as "Behavioural Coach": The program integrates feedback loops to mitigate this risk:

  • Drawdown Simulators & Stress Tests: These tools help investors understand potential losses within historical probability bands, reducing panic-driven exits.

  • Transparent Volatility Data: Provides context for market fluctuations, converting "emotional noise into statistical signal."

Systematic Risk Management and Diversification

The GIP employs a more robust approach to diversification to avoid the concentration risks seen in many traditional funds.

• Concentration Risk: Many "global balanced" funds are criticised for being de facto concentrated in specific styles or regions, such as US mega-cap technology stocks.
  

• GIP's Structure: The program mitigates this through a combination of:

  • Quality-growth equities

  • ETFs

  • Factor-diversified holdings
    

• Proactive Planning: The GIP utilises proprietary stress-testing, including Monte Carlo simulations and drawdown modelling, to anticipate and prepare for sequence-of-returns risk—the primary hazard for retirees. The document concludes, "Where fund managers react, the GIP prepares."
  

IV. Philosophical and Ethical Dimensions

The GIP is framed not just as a financial product but as an ethical and educational alternative to the established system.

Educational Mandate

A key function of the GIP is to teach investors why their portfolio behaves as it does. This educational component compounds over time, making the investor more discerning, independent, and less susceptible to manipulation.

• Ethical Defence: In an environment of mis-selling scandals and opaque ESG claims, this educational function is positioned as an "ethical defence."

• Partnership Model: The GIP reframes the pension not as a "surrender of control" but as a "partnership between knowledge and capital."

A "Protest" Against the Industry

The document concludes by positioning the GIP as a force for the democratization of finance, offering institutional-grade tools to individuals.

• Core Dichotomy: The choice between the two models is presented as a philosophical one:

  • Fund Management: Asks for belief in others' skill; sells comfort.

• GIP: Asks for belief in data and oneself; builds competence.

Final Argument: The GIP is described as "both product and protest - a protest against an industry that monetises ignorance."

Paraphrasing Warren Buffett, its goal is to make investors "approximately right" in a consistent and transparent manner, representing a "quiet revolution" in retirement management.

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Disclaimer: This content is for information and education only and is not financial, tax or investment advice. Past performance is not a reliable indicator of future results. Investments can go down as well as up, and you may not get back the amount originally invested. You are responsible for your own investment decisions. If you are unsure, please seek advice from a regulated financial adviser. The Great Investments Programme is an educational framework, not a fund, and does not manage money or make personalised recommendations.

Alpesh Patel OBE

www.campaignforamillion.com