easiest thing

But, addressing a parliamentary panel, one of them, Chris Patten, the head of the supervisory BBC Trust, offered an unusually insistent defense of the former director, George Entwistle, whom he had hired, and who had been labeled hapless and bumbling by many politicians and newspaper columnists before and after his resignation on Nov. 10.

“The easiest thing to do is to join in the general trashing of a decent man and I’m not going to do that,” Lord Patten told lawmakers, describing Mr. Entwistle as “a decent man” who “doesn’t deserve to be bullied or have his character demolished.”

But Lord Patten, Britain’s last governor of Hong Kong in the 1990s and a public figure of long standing, balked at questioning by one lawmaker, Conservative Philip Davies, who pressed him to provide an itinerary of his work schedule at the BBC. “Certainly not,” he said. “I think it’s a thoroughly impertinent question.”

“What is the role of it? Do you want to know my toilet habits?”

Lord Patten and Tim Davie, the acting BBC director general, were addressing a parliamentary panel known for often aggressive interrogations in scandals at Britain’s newspapers and broadcasters. They were speaking just days before an another inquiry into the separate phone hacking scandal, mainly at Rupert Murdoch’s British newspaper outpost, is to deliver a long-awaited report that could lead to tighter regulation of the rambunctious British press.

The combination of inquiries and findings seemed to illustrate once more the intense scrutiny faced by journalists and editors in Britain at a time when the news business is struggling to make a painful and costly adjustment to the digital era. The newspaper scandal, in particular, has drawn in British politicians, including Prime Minister David Cameron, who have testified about what seems to have been a cozy relationship with Murdoch executives.

But Mr. Davie said that, while the BBC, a British national institution, was going through a “major crisis,” it was not in chaos. “This is not an organization that is falling apart internally,” he said.

Lord Patten has played a central and frequently contentious role in seeking to find a way out of the BBC’s current crisis. Mr. Davie, a former head of BBC radio operations, has been the interim head of the BBC since Mr. Entwistle resigned after only 54 days in office. Sitting side by side to face lawmakers, the two men were appearing before the panel for the first time since Mr. Entwistle’s departure.

One issue before the parliamentary select committee on culture, media and sport was a decision by Lord Patten to authorize resignation benefits to Mr. Entwistle including a payoff equivalent to a full year’s salary of $750,000, twice the contractual obligation.

Lord Patten said on Tuesday that, in negotiations with Mr. Entwistle, “we either had to deal with it quickly there and then, broadly speaking on the terms of 12 months” salary as a payoff, or go through other procedures for compensation base0d on constructive and unfair dismissal, which would have cost the corporation a further $128,000.

“What did we get in return?” Lord Patten said. “First of all, we got a settlement that was less than we would have got had we gone through constructive dismissal.” And second, he said, if any of the current inquiries finds that Mr. Entwistle “has done anything which is in breach of his contract or the BBC disciplinary guidelines, we can claw back some of the remunerations that has been paid.”

Mr. Entwistle appeared before the panel on Oct. 23 when its attention was focused on a decision a year ago by the editor of the “Newsnight” current affairs program to cancel an investigation into the sexual misconduct of Jimmy Savile, a longtime television host who died in Oct. 2011 at age 84. The BBC was also preparing Christmastime programs paying tribute to Mr. Savile.

At that time, Mr. Entwistle was in charge of television programming, while the director general was Mark Thompson, who resigned in September to become the president and chief executive of The New York Times Company. Mr. Thompson appeared on Friday before a separate closed-door inquiry in London into the cancellation of the “Newsnight” segment last year.

Since the panel’s session with Mr. Entwistle on Oct. 23, the scandal has widened after a “Newsnight” broadcast on Nov. 2 wrongfully implicated a former Conservative Party politician in sexual abuse at a children’s home in North Wales during the Thatcher era.

Events in that imbroglio forced Mr. Entwistle to resign. He appeared with Lord Patten at his side to announce his decision. “I think he found the whole thing an appalling experience, appalling,” Lord Patten said, but added: “I think his departure was in his interest and the BBC’s I’m afraid.”Lord Patten said the second “Newsnight” program showed “appalling editorial judgment. The journalism was — to be polite — shoddy.”

He added: “This was a terribly elementary journalistic failure.”

Mr. Davie said many journalists at the BBC were “aghast at the basic error that was made.”

A BBC inquiry into the second “Newsnight” episode found that journalists failed to give a right of reply to the person they implicated and did not ask his accuser to positively identify him. The report implicated but did not directly identify Alistair McAlpine, the former treasurer of the Conservative Party.

Lord McAlpine has since reached out-of-court libel settlements with the BBC for about $295,000 and with its main commercial rival, ITV, for about $200,000. Last week, the BBC announced that Tony Hall, the head of the Royal Opera House, would take over as the BBC’s director general next year.

Between now and then the British print and broadcast industries face a thicket of inquiries. The BBC has started two internal investigations. One is into the cancellation of the “Newsnight” segment, led by Nick Pollard, a former head of the rival Sky News, and the other is into the culture and practices of the BBC over decades.

The parliamentary panel is also likely to call further witnesses while, on Thursday, much attention in Britain will be focused on the publication of the report by Lord Justice Sir Brian Leveson, who has conducted lengthy inquiries into the phone hacking scandal, with witnesses including Mr. Murdoch and his son James testifying publicly and under oath.

Apart from those inquiries, Scotland Yard is conducting three police investigations into phone hacking, computer hacking and the corruption of public officials. Scores of journalists, lawyers, executives and others have been arrested and questioned.

John F. Burns reported from London and Alan Cowell from Paris.

Article source: http://www.nytimes.com/2012/11/28/world/europe/panel-to-question-top-bbc-figures-about-abuse-scandals.html?partner=rss&emc=rss

The best-performing funds over time were not necessarily the ones with the lowest fees, run by the best-known managers or focused on any particular strategy, according to more than 20 years of data examined by DAL Investments, an investment adviser and publisher of the NoLoad FundX newsletter in San Francisco. DAL analyzed the returns on 306 mutual funds for The New York Times.

Janet M. Brown, president of DAL Investments, said the deep dive was motivated as much by trying to figure out what worked as by testing the effectiveness of the firm’s own unconventional strategy. (More about that later.)

“The overall challenge of mutual fund investing is selecting funds in advance that people think will do well in the future,” Ms. Brown said. “The easiest thing would be to buy and hold or to select a manager with a good long-term track record and buy it and forget it. That was not an effective way of selecting funds.”

The 306 funds in the study were founded before 1989 and still exist. They all invest broadly with various styles and none concentrated on one sector. The data spans 21.75 years, from Dec. 31, 1989, to Sept. 30, 2011. The performance of the funds was measured against the Vanguard S. P. 500 Index Fund, which had annual returns of 7.65 percent during that time.

As much as people in the fund industry may want to measure their performance against a narrowly defined index, the reality is that most investors judge their returns against the S. P. 500, for better or worse.

So what did the study find?

PERFORMANCE Over the two decades of the data, no one investment strategy dominated, and most were successful for only four to five years, on average. Not one fund beat the benchmark every year.

In fact, most funds underperformed the S. P. 500 about a third of the time.

The top-performing mutual fund in the study was the FPA Capital Fund, which invests in small- and midcapitalization stocks, generally defined as companies with market capitalizations of $300 million to $10 billion. It had an annual return of 14.43 percent, and it beat the index 15 times.

The best manager against the benchmark was Bill Miller, chairman and chief investment officer of Legg Mason Capital Management. His Value Trust fund outperformed the benchmark in 16 of the 22 periods of the survey. Yet it ranked only 187, with an annualized return of 7.37 percent. This was lower than the benchmark.

The eighth-ranked fund in the survey, the Heartland Value, underperformed 10 times and still returned 11.66 percent annually. Its long-term performance demonstrated how stellar years attract the attention, but the bad years, when the fund kept losses in check, were more significant. The RS Investments Small Cap Growth fund, for example, underperformed the S. P. 500 more than it outperformed it, yet still beat it with an annual return of 9.85 percent.

The study also disputed the value of hitching your strategy to star managers. Mr. Miller was one example but so, too, were the various managers of Fidelity’s famous Magellan Fund. It underperformed the benchmark 14 times and ranked 222, with annual returns of 6.74 percent.

One reason star managers fail over the long term is that they become known for a particular style of investing that may go in and out of favor. DAL’s research found that no one style was dominant for the whole period. But funds focused on small- and midcap stocks did perform the best over this period. (Ms. Brown cautioned against reading anything into this for the future.)

“In my view, it has less to do with the brilliance of the portfolio manager as when their styles are in sync with the market,” she said.

EXPENSES One belief that investors take as gospel is that high expenses erode gains. On the one hand, this is obvious — the more that goes to the manager, the less that goes to you. But what the DAL study found was that there was only a slight correlation between lower expenses and higher performance. And the level of fees was not a determining factor in which funds beat the benchmark over the long term.

DAL divided the results into quintiles. Funds in the top performing group had fees that ranged from 0.45 to 2.01 percent. Funds in the middle had fees from 0.10 to 2.0 percent, while those in the worst-performing group had fees from 0.39 to 3.84 percent. (There were only three with fees higher than 2.5 percent.)

The expenses on the top-performing FPA Capital Fund were 0.87 percent. The average expense of the top 20 funds was 1.07 percent. The fund with the lowest expenses, the Fidelity Spartan 500 Index fund, was ranked 161st with an annual return of 7.58 percent.

The two worst-performing funds, the Stonebridge Institutional Small-Cap Growth Fund and Midas Magic, did charge the highest fees in the study at 3.4 and 3.84 percent. Their annual returns were 2.66 percent and 0.58 percent.

If expenses, and not return, were the primary concern, Ms. Brown said an investor should simply invest in an index fund and forget about it.

Article source: http://feeds.nytimes.com/click.phdo?i=8abfb36669fc2f720003a4d094ff3f9f

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