Consensus Funds
Hi Virus,
You and I have agreed before, but this time ... I'm afraid it is a silly point.
Consensus funds are simply indexed funds taken to the asset level. They make their asset selection (how much in Irish equities, US equities, etc) in accordance with manager averages, and invest in the underlying stocks (how much in IBM, Microsoft etc) in accordance with market indices.
Because active managers, on average, take away rather than add value through their trading decisions, consensus funds have historically given better returns, at less risk, and with lower charges, than most active managers.
It used to be argued that the make-up of consensus funds meant they would do better in rising markets and worse in declining ones (presumably because active managers could raise cash which would only reflected by consensus funds at a later stage), but they seem to have done pretty well recently too.