Discussion
nyt said:
I didn't think that the comparison was too far out.
The OPs fund is 59% equities and Fundsmith is known for selecting 'boring' companies that are likely to maintain profits whatever the economy does.
If I misled the OP then apologies
No apology needed.The OPs fund is 59% equities and Fundsmith is known for selecting 'boring' companies that are likely to maintain profits whatever the economy does.
If I misled the OP then apologies
But comparing two very different funds over a short time period, where equities have had an unusually stable and positive return could be confusing!
sidicks said:
No apology needed.
But comparing two very different funds over a short time period, where equities have had an unusually stable and positive return could be confusing!
Well I did say that the economics that had helped the performance of 'Bond Proxies' were likely changing (in a separate post).But comparing two very different funds over a short time period, where equities have had an unusually stable and positive return could be confusing!
And the OPs fund really doesn't seem to have shone considering that it's 59% equities and Bonds (21%) have also done well.
Come to think of it the 10% property component shouldn't have performed too shabbily either.
nyt said:
Fundsmith is so stable that its often referred to as a "Bond Proxy Fund". These are currently out of favour with the press, and it does look like the economic environment where they shone is ending.
Are you suggesting that whilst being a solid fund that has consistently done well, that it is out of favour because the market is potentially in a period of downturn and therefore it might not do as well, or do you mean something else?nyt said:
If I misled the OP then apologies
Don't worry about that, EVERYTHING is confusing me at the moment with this. I really need some hand holding, but I've always steered clear of financial advisors because they have a vested interest in certain funds that profit them the most.nyt said:
Well I did say that the economics that had helped the performance of 'Bond Proxies' were likely changing (in a separate post).
And the OPs fund really doesn't seem to have shone considering that it's 59% equities and Bonds (21%) have also done well.
Come to think of it the 10% property component shouldn't have performed too shabbily either.
It is probably a terrible fund, I just don't know at this stage. It is/was an option just because of where some of my ISA is, but if it turns out to be less than impressive, it is only within an ISA wrapper, so I would imagine can be moved as past years allocation anyway.And the OPs fund really doesn't seem to have shone considering that it's 59% equities and Bonds (21%) have also done well.
Come to think of it the 10% property component shouldn't have performed too shabbily either.
The frustration is I cannot just ask "what should I do", but equally, there is no way I'd throw 6 figure sums into something I know nothing about, which is why I'm trying my best (whilst doing my day job and looking after my family) to learn. I would imagine that starting from scratch, throwing in small amounts at a time would require a little less consideration or concern, because of the reduced risk, so I'm wise to treat my ISA funds like that, and drip feed, but as said, I just don't know where yet, and whether NOW is a good time with the markets. I'm looking for a simpler way of letting my money work for me, I tried and failed (badly) at the stock market directly many moons ago so I don't want to return to those dark days!
Edited by mdianuk on Wednesday 12th April 14:32
Do Hargreaves Lansdown make for a safe and reliable provider of funds and portfolio options? Seems they are a well respect vehicle for more successful funds rather than using a conventional bank. I'm looking at their Portfolio+ options (6 in total), but cannot find any information on how they perform!
ReallyReallyGood said:
On the topic of funds, given Brexit and the future volatility of GBP, are there non-actively-managed funds that contain within them a currency hedge? I don't want to worry about Brexit deals messing about with my investment value if I can help it.
Yes, there are a lot of funds that invest in the US/EU and Japan that have a version of the fund that is currency hedged. I read a piece about them somewhere and did a little researched upon which my head exploded and I decided ignorance is bliss, they are more expensive and I think the general rule of thumb is that over a decent investment horizon if you're investing in foreign equity funds is that these things tend to cancel out.The funds are prefixed xgbp or x(whatever currency you want to hedge) as far as I remember.
sidicks said:
MrGRT said:
I use a combination of leverage 2x market tracker with very low expense ratio and a fund that invest on GBP inflation linked Gilts.
The allocation to each varies of course but I try to have more on the leveraged tracker.
There are many funds that you can invest within an ISA, you don't have to commit to only 1.
Do your research and select what best suits you.
Why would you be buying inflation linked gilts at negative real yields?The allocation to each varies of course but I try to have more on the leveraged tracker.
There are many funds that you can invest within an ISA, you don't have to commit to only 1.
Do your research and select what best suits you.
For the way I invest, I don't care much for yields, hold on there for a second.
I need one fund that tracks the market but is leveraged, and the rest of the money is invested in a less volatile fund that preferably uses bonds and cash.
If the market goes up too much in a quarter I shave money of the 2x tracker and this money goes to the other fund, if the 2x tracker goes down in a quarter I buy more using money from the other fund. I use specific thresholds for these actions.
I back tested this using the last 14 years and also then tested against fictitious market that had a similar standard deviation, that gave me a combination of values which are my thresholds.
This simply works for me as now I only have to check every quarter to decide what to do.
Why Gilts instead of the Bond fund that I mentioned I should use?, no other reason than I thought it will be less volatile and return me a small dividend at the time, I am always checking Bond funds that are available through my ISA provider and If I find one suitable for my strategy I might consider changing (will back test it for sure)
This is the one I use:
YTD: 7.47% up
12 months below.
I am not a professional investor but have read and invested for close to 14 years now.
mdianuk said:
...I really need some hand holding, but I've always steered clear of financial advisors because they have a vested interest in certain funds that profit them the most.
This is perhaps an assumption to revisit; changes in regulation alone mean that it is less true than ever. Given your financial situation and the questions you are asking here, I think you would benefit from a good adviser who can help you up the learning curve. As you are finding there is a lot of ground to cover. If you ask friends/colleagues for recommendations you'll find an adviser who will work with you for a transparent fee that is entirely unrelated to any products they might suggest.nyt said:
It's all a matter of timing imo.
If you invested in the FTSE 100 10 years ago you would have gained about 12% over the 10 years. If you invested in early 2009 then you'd have gained 80% isn.
There is loads of data on: www.google.com/finance
I suggest that you compare FTSE 100 (INDEXFTSE:UKX) with managed funds. Perhaps the famous Fundsmith (MUTF_GB:FUND_EQUI_T_1UJO18H)
Google has figures for most major indices and funds if you hunt around.
Sites like iii.co.uk will tell you which indices the funds are tracking.
Good luck
You're confusing the value of the FTSE100 index with investing in the FTSE100, the difference being dividends (and tracking errors & charges).If you invested in the FTSE 100 10 years ago you would have gained about 12% over the 10 years. If you invested in early 2009 then you'd have gained 80% isn.
There is loads of data on: www.google.com/finance
I suggest that you compare FTSE 100 (INDEXFTSE:UKX) with managed funds. Perhaps the famous Fundsmith (MUTF_GB:FUND_EQUI_T_1UJO18H)
Google has figures for most major indices and funds if you hunt around.
Sites like iii.co.uk will tell you which indices the funds are tracking.
Good luck
The FTSE100 total return index is up 66% since 10 years ago and about 144% since early 2009.
Edited by CarlosFandango11 on Wednesday 12th April 18:23
MrGRT said:
sidicks said:
MrGRT said:
I use a combination of leverage 2x market tracker with very low expense ratio and a fund that invest on GBP inflation linked Gilts.
The allocation to each varies of course but I try to have more on the leveraged tracker.
There are many funds that you can invest within an ISA, you don't have to commit to only 1.
Do your research and select what best suits you.
Why would you be buying inflation linked gilts at negative real yields?The allocation to each varies of course but I try to have more on the leveraged tracker.
There are many funds that you can invest within an ISA, you don't have to commit to only 1.
Do your research and select what best suits you.
For the way I invest, I don't care much for yields, hold on there for a second.
I need one fund that tracks the market but is leveraged, and the rest of the money is invested in a less volatile fund that preferably uses bonds and cash.
If the market goes up too much in a quarter I shave money of the 2x tracker and this money goes to the other fund, if the 2x tracker goes down in a quarter I buy more using money from the other fund. I use specific thresholds for these actions.
I back tested this using the last 14 years and also then tested against fictitious market that had a similar standard deviation, that gave me a combination of values which are my thresholds.
This simply works for me as now I only have to check every quarter to decide what to do.
Why Gilts instead of the Bond fund that I mentioned I should use?, no other reason than I thought it will be less volatile and return me a small dividend at the time, I am always checking Bond funds that are available through my ISA provider and If I find one suitable for my strategy I might consider changing (will back test it for sure)
This is the one I use:
YTD: 7.47% up
12 months below.
I am not a professional investor but have read and invested for close to 14 years now.
sidicks said:
MrGRT said:
I use a combination of leverage 2x market tracker with very low expense ratio and a fund that invest on GBP inflation linked Gilts.
Why would you be buying inflation linked gilts at negative real yields?If your answer were to be "because that's how the market values them" then it's obvious why somebody would buy them, especially in light of your expressed enthusiasm for passive tracking.
rockin said:
I can't see any information in the post which suggests "negative real". Please explain.
Which index-linked Gilts are NOT currently offering negative real yields?!rockin said:
If your answer were to be "because that's how the market values them" then it's obvious why somebody would buy them, especially in light of your expressed enthusiasm for passive tracking.
Please explain?1. Precisely
2. In order to justify "tracking" the equity market you have to believe it's not worth the cost/effort of trying to beat the market by making active decisions.
Index-linked gilts are much simpler than equities and are priced by the market. Again, the only way to do better than the market is by trying to make active decisions.
It would IMO be completely illogical to track equities yet at the same time try to beat the gilt market by active management.
2. In order to justify "tracking" the equity market you have to believe it's not worth the cost/effort of trying to beat the market by making active decisions.
Index-linked gilts are much simpler than equities and are priced by the market. Again, the only way to do better than the market is by trying to make active decisions.
It would IMO be completely illogical to track equities yet at the same time try to beat the gilt market by active management.
So, getting this thread back on track, as it got massively derailed (which is fine if I understood it!), where should I look if I wanted to invest in Index Funds (I assume also called Index Trackers). Many mention Vanguard, Fidelity etc, but who provides these, do the likes of Hargreaves Lansdown do within an ISA? Am I correct in assuming that instead of investing in a 'Fund', it is almost created as an all encompassing share? Bit of guidance on index trackers appreciated.
(just a note to say that I appreciate that index based investments are more reliant on a strong financial market and at the moment may appear a little 'toppy' - at the same time, it seems that managed funds can outperform index trackers, but generally only in the short term, and that picking a strong performer is risky).
(just a note to say that I appreciate that index based investments are more reliant on a strong financial market and at the moment may appear a little 'toppy' - at the same time, it seems that managed funds can outperform index trackers, but generally only in the short term, and that picking a strong performer is risky).
mdianuk said:
So, getting this thread back on track, as it got massively derailed (which is fine if I understood it!), where should I look if I wanted to invest in Index Funds (I assume also called Index Trackers). Many mention Vanguard, Fidelity etc, but who provides these, do the likes of Hargreaves Lansdown do within an ISA? Am I correct in assuming that instead of investing in a 'Fund', it is almost created as an all encompassing share? Bit of guidance on index trackers appreciated.
(just a note to say that I appreciate that index based investments are more reliant on a strong financial market and at the moment may appear a little 'toppy' - at the same time, it seems that managed funds can outperform index trackers, but generally only in the short term, and that picking a strong performer is risky).
HL ISA/SIPP gives you access to purchase a very wide selection of funds, but they have a "Wealth 150+" selection...(just a note to say that I appreciate that index based investments are more reliant on a strong financial market and at the moment may appear a little 'toppy' - at the same time, it seems that managed funds can outperform index trackers, but generally only in the short term, and that picking a strong performer is risky).
http://www.hl.co.uk/funds/help-choosing-funds/weal...
within which they have a "Wealth 150 Trackers" selection (the ones with the purple stars). Basically anything that tracks an index reasonably well and has very low charges (<0.1%) - have a look, there's many big institutional players that provide them, L&G, HSBC, JP Morgan, Blackrock etc...
These are generally Unit trusts or OEICs - ETFs are slightly different in their legal structure and you can trade them like a share, but it matters not either way if you're buying to hold and invest long term.
I'm not sure I fully understand your questions, but as per one of my posts choose a provider, such as hargreaves lansdown etc. I use bestinvest.
Then open a stocks and shares isa. On bestinvest at least, you can then choose to put your money in hundreds of different funds. I searched for an index and went for one run/manage by HSBC. The investments can all be seen live on bestinvest website
Then open a stocks and shares isa. On bestinvest at least, you can then choose to put your money in hundreds of different funds. I searched for an index and went for one run/manage by HSBC. The investments can all be seen live on bestinvest website
mdianuk said:
So, getting this thread back on track, as it got massively derailed (which is fine if I understood it!), where should I look if I wanted to invest in Index Funds (I assume also called Index Trackers). Many mention Vanguard, Fidelity etc, but who provides these, do the likes of Hargreaves Lansdown do within an ISA? Am I correct in assuming that instead of investing in a 'Fund', it is almost created as an all encompassing share? Bit of guidance on index trackers appreciated.
An index tracker is simply a fund (like almost any other fund) where the underlying investments are designed to replicate the associated index.mdianuk said:
(just a note to say that I appreciate that index based investments are more reliant on a strong financial market and at the moment may appear a little 'toppy' - at the same time, it seems that managed funds can outperform index trackers, but generally only in the short term, and that picking a strong performer is risky).
1. Be careful not to confuse actively managed funds (managers taking active positions to outperform an index benchmark) with a managed fund (an investment fund that diversifies across a number of different asset classes).2. Remember that, for equities in particular, the bulk of the return comes from the market and the active management is a relatively small addition (or subtraction).
If the index return is (say) +8%, the active manager's return might typically be between +6.5% and +9.5%, so ALL strategies are equally exposed to 'strong financial markets'.
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