Bonds

[sidicks]

bhstewie said:

My (sort of) ongoing plan was to throw 50% in a world tracker then have the other 50% in something that's pitched more as "income" but get the accumulation units so it all goes back in.

Why?!

bhstewie said:

I think that way I can get some risk but hopefully some stability too albeit at the loss of some return - regardless of the logic I can't guarantee I wouldn't panic if I woke up one morning and found it was 2008 all over again.

I also plan on throwing the odd £5k into something like Fundsmith/Lindsell Train but more as a "punt" than as part of an ongoing plan if that makes sense?

I'd be interested why you've said 100% equities - presume simply because I have pure cash to ride out most storms? Most guides online have come back at around 60-80% equities as suggested number but of course different people have different methodologies.

With a 10-15 year time horizon you can afford to accept short term volatility. I’d be reducing risk over time as your time horizon reduces and where your risk tolerance becomes greater.

[bitchstewie]

sidicks said:

bhstewie said:

My (sort of) ongoing plan was to throw 50% in a world tracker then have the other 50% in something that's pitched more as "income" but get the accumulation units so it all goes back in.

Why?!

From my POV a world tracker is diverse v piling into just one area.

With the other "pile" maybe "income" is the wrong word but there appear to be plenty of funds out there who aim to preserve capital i.e. you don't gain as much but you're not 100% exposed to the markets.

That was my logic anyway..

[sidicks]

bhstewie said:

From my POV a world tracker is diverse v piling into just one area.

With the other "pile" maybe "income" is the wrong word but there appear to be plenty of funds out there who aim to preserve capital i.e. you don't gain as much but you're not 100% exposed to the markets.

That was my logic anyway..

Sorry, my question was about investing in accumulation units within income funds. I’m not sure I understand the benefits you think you are getting?

[bitchstewie]

sidicks said:

Sorry, my question was about investing in accumulation units within income funds. I’m not sure I understand the benefits you think you are getting?

More likely I don't understand and you're being polite

When I look at funds there are often "acc" and "inc" versions.

I was going off this http://monevator.com/income-units-versus-accumulat...

I thought that "inc" means returns are paid out directly whilst "acc" means they're reinvested directly into the fund i.e. even with a fund that's classed as "income" the returns are being returned into the fund automatically.

So in my case with no immediate requirement for the returns the "acc" made sense.

Keep in mind I'm only using the word income because it seems many of the more cautious funds are named "XYX income fund".

[xeny]

My (limited) experience/impression is that funds that are "income" focussed (say yields of >3% ?) is that even with reinvestment of distributions (~dividends) the overall return is worse than funds that are straight growth focussed.

[sidicks]

bhstewie said:

More likely I don't understand and you're being polite

When I look at funds there are often "acc" and "inc" versions.

I was going off this http://monevator.com/income-units-versus-accumulat...

I thought that "inc" means returns are paid out directly whilst "acc" means they're reinvested directly into the fund i.e. even with a fund that's classed as "income" the returns are being returned into the fund automatically.

So in my case with no immediate requirement for the returns the "acc" made sense.

Keep in mind I'm only using the word income because it seems many of the more cautious funds are named "XYX income fund".

Not at all.

I think I understand your approach:
You’ve identified more defensive funds (which happen to be income funds) but you don’t want income so you’d hold the accumulation units. Rather than you’re seeking income funds (because you believe they are more defensive).

[bitchstewie]

sidicks said:

Not at all.

I think I understand your approach:
You’ve identified more defensive funds (which happen to be income funds) but you don’t want income so you’d hold the accumulation units. Rather than you’re seeking income funds (because you believe they are more defensive).

I think that's a fair assessment.