Paul Myners goes for a cheap trick in his letter ( April 26), pointing out that “well over 50 per cent of diversified equity managers” would do better to go on holiday than to manage their portfolios. He suggests that it is more insightful to compare investment performance with a manager’s inertia portfolio than with an index or benchmark. But is he doing more than reminding us that, after costs, the average manager underperforms?

I am Chairman of Henderson EuroTrust plc; our board is aware of the risks and costs associated with excessive trading and, as a matter of good governance, reviews performance versus both the index and, separately, measures the impact of trading activity. One of the many merits of an Investment Trust as a vehicle for investors is this monitoring process by an independent board. The most recent review has shown that over the past seven years the manager added significant value from transactions in the portfolio, net of both fees and dealing costs, as well as outperforming the benchmark index. We are glad that our fund manager does not spend too much time on holiday.

Nicola Ralston
Chairman, Henderson EuroTrust

London EC2, UK

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