This is an interesting debate about what matters most to investors.
We are all different and some of us prefer more security for our savings - the return
of our capital that Peter talks about. That is fine and there is nothing wrong with this preference. For some people that is all that matters and we tend to think of them as savers.
However, for some people - let's call them investors - return
on their capital is more important. They understand that risk and
expected return are related. If I want a higher expected return,I have to be willing to bear more investment risk.
Note that I say,
expected return, the extra return is not guaranteed that is why it is a risk, if there was no risk there would be no extra return (this is why a tracker bond doesn't work)
So, if we compare a sample of investments over a reasonable period of time, we should find that some of these will have performed better than cash and some will have done worse.
For example if we look at the period since the birth of the Euro to the end of March 2010 (a reasonable period) which includes a lot of risk, we get the following results:
[FONT="]Cash - German 3 Month Money Market Rate 3.13775%pa[/FONT]
[FONT="]Equities - MSCI World Index (gross div.) 1.34595%pa[/FONT]
[FONT="]Global Real Estate - S&P Global REIT Index (gross div.) 8.31470%pa[/FONT]
[FONT="]Emerging Markets - MSCI Emerging Markets Index (gross div.) 12.89847%pa[/FONT]
[FONT="]Commodity - Gold 12.92264%pa[/FONT]
Source:MSCI, LBMA.org.uk,Bundesbank
So, "Stocks" as measured by the MSCI World Index had a bad time - but really this is a measure of the performance of large company stocks in the developed world.
Emerging Markets have had a great run and clearly investors were compensated for the risks they took.
The conclusion I reach is that investors can clearly be compensated for taking investment risk, but that they also need to diversify their investments across different asset classes in order to reduce the risks.
However, the real problem here is not one of risk preference but as another poster correctly identified one of fees paid for active management.
The additional premium that an investor expects as compensation for taking investment risk can be largely swallowed up by management and trading fees and in our studies as much as 3%pa can be lost in fees and expenses.
This is the real reason not to invest in the Rabo funds - they are actively managed and therefore have high management and trading costs which reduce the returns for an investor.
For more on this subject click [broken link removed]
For an investment of €20,000 I would recommend that you check out Rory Gillen's
InvestRCentre. They will help you look at the merits of a portfolio of Exchange Traded Funds (ETFs) which have considerably lower fees than the Rabo funds.