You bring up a few points there Gummy. From my perspective there's a few key advantages we can leverage compared to a typical managed fund.

First is size. Most of the fund money gets invested in companies with at least a billion dollar market cap. Microcap funds have more flexibility but even so they still have limitations and the maths explains why. Some microcap funds can grow a FUM to $500m, but lets say I'm a relatively small one of just $50m FUM. And let's pretend I didn't have rules around investing in companies with average daily volume less than a certain level and my target had a really big free float (both are big assumptions that would further reduce the investing universe of most microcap fund managers). Let's say the two rules I did have was that I didn't want to own more than 4% of any given company and I didn't want a starting position of more than 5% of my FUM. That would mean the minimum Market Cap of companies in my investment universe is $62.5m ($50m FUM x 5% max starting position = $2.5m initial ownership divided by 4% max company ownership). If they can't buy them they're not going to spend time looking at them so as private investors we've got a whole lot of companies at the small end to ourselves. When I say ourselves I mean go over to Hot Copper and read most of the commentary on there - they're potentially on the other side of the transaction. Doing so generally gives me greater sense of confidence as to who is the greater fool.

Second is concentration. Diversification reduces risk but it also caps performance. In the growth stage of your portfolio, if you have time to dedicate to the market, diversification is not necessarily your friend. I noticed Wini's new Fund allows for a position to grow to up to 20% of the portfolio - that's pretty unusual for a fund manager, typically they're a lot less. David Gardiner (Motley Fool co-founder) has a concept of finding your sleep number. Your sleep number is the percentage of your portfolio you are comfortable to have in a single holding (and still sleep at night). His sleep number is at least 85 because at one stage his AOL position grew to be 85% of his portfolio. Evidently my sleep number is at least 20 because that's the percentage of my portfolio in my largest real life position. It's grown to be that but I'm not selling any while the thesis is intact.

The third advantage is herding. Many fund managers, particularly the bigger ones, end up as index huggers with maybe the odd position that gets them outperformance one year in three. They know that their members aren't likely to leave in droves if they materially match the market and when their peers are doing the same they're materially matching their peers too. Whereas we are not interested in holding the same as everyone else and matching the market. We'd buy an ETF if that was the go. Incentives for a lot of fund managers drive herding, incentives for us drive the opposite. And you know what Charlie Munger says about incentives and outcomes...

So basically given I have time to devote to the market and for the reasons above I'm pro-DIY but I do track my performance against a few micro cap fund managers to keep myself honest. ETFs are bit different. Their diversification is often cited as a strength. I think eventually too much diversification can be a bad thing but I like them from the perspective of getting access to particular market (let's say the U.S.) or thematic (e.g. Robotics, Batteries, Crypto etc.) that would otherwise be hard to do.