The skill of the fund manager, the companies they invest in, market timing, time in the market?
Brinson, Hood and Beebower in 1986 set about finding out what actually determines the returns you achieve by investing in the markets. This is what they found.
To the surprise of many investors even now, what they think their fund managers are good at has very little to do with returns. Most active fund managers try to select the best companies and steer their fund through various market cycles, getting paid handsomely to do so, in the hope that they will beat their peers. What actually transpires is that these active fund managers are operating in that tiny little red and green space in the chart above.
That is because by far the majority of the variation in returns (94%) are determined by the asset allocation policy you have at a much higher portfolio level. So selecting fund managers once you have determined the asset allocation is a much smaller, almost insignificant choice compared to the decision of how to allocate assets across sectors such as UK Equities, Global Equities, Emerging Markets, Asia, Bonds, Gilts, Commodities etc.
Spending time on the things that make you the most money surely therefore means concentrating more on asset allocation and less on picking fund managers?
If you, or your adviser are spending time moving between fund managers, looking, researching, discussing these choices, then I dare say you are wasting your time.