Your questions answered Vol 2 - IM Private Clients

[Simpo Two]

AdamIM said:

Simpo Two said:

AdamIM said:

I also wanted to say that mandates drive the types of assets we are able to hold so whilst we can mitigate, we can't fully insulate completely against such market corrections.

Are there funds where the managers in charge can do 'whatever is required' to save investors' skins?

Neil Woodford ran such a Fund

That is probably more to do with Mr Woodford.

Any others with a more flexible remit making a better job of it?

[mikeiow]

AdamIM said:

mikeiow said:

2Btoo said:

Tony Angelino said:

Is it safe to look at PHO anything yet?

Mmmm: indeed.


I'd welcome IM thoughts on the "lower risk" funds, & their hopes/aspirations/plans for the coming 12-24 months.

We popped a small chunk into IM Optimum Defensive, just over a year ago. A safe place for that little chunk, we believed. Stupid us!
Since then, that little chunk is almost 19% down.....

Equally, since June this year, we have been feeding a small amount to the Optimum Cautious - again, in the hope it might be less volatile.....& that is worth less than we've paid in.

Now I appreciate how this year has broadly panned out.
Heck, I still have massive burns from the chunk of BG American in my main pension pot.
Nonetheless, it would be useful to hear the thoughts of Adam/Nik/Julian on where things are heading.

I am a believe in not crystallising losses, but at some point some of these funds will be required!
thx

Hi Mikeiow,

Both Cautious and Defensive contain a large weighting in Gilts. Our strategy (the investment committee) has been shifting to shorter maturity assets which have not been impacted at much as longer dated maturities (simple maths). The last quarter has been particularly volatile with -6.5% and -4.1% for Defensive and Cautious. It may be little consolation that 92% of the roughly 800 exchange traded funds also incurred losses, some as high at -28% for the quarter. This isn't an IM problem, it is security/industry wide.

Gilt prices change daily (stating the obvious) due to daily changes in yield and asset managers are required to report this change. But if we assume there is no real credit risk, they will be repaid at 100 (100%) of face value. In simple terms this means the reduction in price (current 30 year priced at 47, will revert to 100).

From the analysis we have recently done, and the investment committee is meeting next week to discuss all of this, the belief it that, the material spike in rates witnessed very recently (mini budget and GBP sharp fall) is the majority of the pain and it will reverse.

I also wanted to say that mandates drive the types of assets we are able to hold so whilst we can mitigate, we can't fully insulate completely against such market corrections.

The above relates to predominantly FI portfolio's.

Thanks for the reply Adam.

On the piece I have highlighted, does that imply you anticipate things recovering (for existing monies invested in those funds), or stabilising and allowing new investments to them to revert to the expected behaviours? (not sure if that reads well or not!)

Certainly be interested in an update after next weeks meeting: only 2 more Chancellors until Christmas, that makes everything feel jittery

[Phooey]

Simpo Two said:

Are there funds where the managers in charge can do 'whatever is required' to save investors' skins?

I think Cathie Wood tries to do such a thing (-65% YTD) :cough:

It's obviously something that sounds easy in hindsight, but almost impossible to do in practice. And regards to the bond market (not something I know much about admittedly) but no one could have predicted the bonds sell off. The only positive from here is future returns are higher - so JKBTFD.

[Sheepshanks]

Phooey said:

....And regards to the bond market (not something I know much about admittedly) but no one could have predicted the bonds sell off.

I might be missing something (I certainly did in the recent past) but it seems bonds and gilts are bound to go down in price as interest rates increase. I guess once it starts it becomes a self-fullfilling spiral down.

Near retirement, one of my funds is down a very chunky amount - do I hold on, or cut and run?

[Phooey]

Sheepshanks said:

I might be missing something (I certainly did in the recent past) but it seems bonds and gilts are bound to go down in price as interest rates increase. I guess once it starts it becomes a self-fullfilling spiral down.

Near retirement, one of my funds is down a very chunky amount - do I hold on, or cut and run?

I always remember Julian at the time saying the most volatile fund was Index100 - simply because it is 100% equities and predominantly (60+%) US-weighted. Which makes sense. However, the US$ has strengthened and/or the UK£ has weakened - which means a holder of Index100 units (before the $v£ moved significantly) has seen the lowest decline - a reversal of what is typical of a high-risk vs low-risk fund. Vanguard Lifestrategy is similar - the defensive LS20 fund is -16.79% YTD (30th Sept.22) whereas the higher risk (LS100) is -9.52%. This year low-risk has been hit hard. Of course if the $ weakens then the game changes again.

[AdamIM]

Phooey said:

Sheepshanks said:

I might be missing something (I certainly did in the recent past) but it seems bonds and gilts are bound to go down in price as interest rates increase. I guess once it starts it becomes a self-fullfilling spiral down.

Near retirement, one of my funds is down a very chunky amount - do I hold on, or cut and run?

I always remember Julian at the time saying the most volatile fund was Index100 - simply because it is 100% equities and predominantly (60+%) US-weighted. Which makes sense. However, the US$ has strengthened and/or the UK£ has weakened - which means a holder of Index100 units (before the $v£ moved significantly) has seen the lowest decline - a reversal of what is typical of a high-risk vs low-risk fund. Vanguard Lifestrategy is similar - the defensive LS20 fund is -16.79% YTD (30th Sept.22) whereas the higher risk (LS100) is -9.52%. This year low-risk has been hit hard. Of course if the $ weakens then the game changes again.

Quite. As seen here, figs as at month end 30 September (net of all costs).



Sheepshanks, if you require some guidance, Nik or myself would be happy to discuss via email/phone.

Cheers

Adam

Edited by AdamIM on Saturday 15th October 17:42

[Sheepshanks]

AdamIM said:

Sheepshanks, if you require some guidance, Nik or myself would be happy to discuss via email/phone.

Thanks, a discussion would be helpful. How should I arrange that?

[Carbon Sasquatch]

Just typical that this is the first year I've tried to 'de-risk' and move away from 100% equity.

It is useful to see the actual numbers though - and definitely makes you realise that the FX rate can be at least as impactful as the underlying performance. Though I'm none the wiser with what to do with that knowledge.....

[droopsnoot]

Slightly O/T, but thanks to everyone involved at Donington British GTs today, another excellent day and the first time I've been to the GTs without it raining sideways for the entire day. My mate and I have been looked after very well today, and we appreciate it.

[Beerfinch]

Same here, fantastic weather, great hospitality and brilliant racing. Good to meet Nik again, thanks to everyone involved for an excellent day.

[A110MW]

Yes just to echo the above, had a fantastic day with a mate at Donington. Huge thanks to the entire IM and SRO team for the great hospitality. Was good to meet Nik in person.

[supersport]

Same here, it was another great day and so different to last year i.e. warm and dry.

Thank you.

[mikeiow]

I’ll fifth that - what a fabulous couple of days!

Great to catch up with Nik, & thanks for the hospitality, it was nice to be able to relax & enjoy brekky/lunch.

Racing was fun….managed around 15,000 steps yomping all around the track for different views.
Also loved some of the exotica around the place: watched the unloading yesterday (& today, reloading) of the DK Engineering motors: that Bizzarrini was truly a thing of beauty!

The pit lane & grid walk was very well done - thanks for sorting that so well Enjoyed some good banter with Ainsley - told him he looked very like a cardboard cutout they had last year, he asked if we still had the couscous
Cheers!

ETA - I've popped a few pics over on the 'proper' GT thread at https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by mikeiow on Monday 17th October 09:09

[superlightr]

To clarify please.
We have a pension monthly payment set up to IM with various proportions to different funds and then a month or so later you get the govt adding their bit.

If you pay a lump sum into your pension held with IM and it is paid in as Cash/held is this the trigger for the Govt to add their bit? ie as its now in the pension as cash? or is the trigger when it gets moved from cash to say IM Index 100 etc.

I guess its when it enters the pension as cash.

thanks

[mikeiow]

superlightr said:

To clarify please.
We have a pension monthly payment set up to IM with various proportions to different funds and then a month or so later you get the govt adding their bit.

If you pay a lump sum into your pension held with IM and it is paid in as Cash/held is this the trigger for the Govt to add their bit? ie as its now in the pension as cash? or is the trigger when it gets moved from cash to say IM Index 100 etc.

I guess its when it enters the pension as cash.

thanks

I am 99.9999%* sure your guess is right.
You have moved it into the pension "wrapper" that is the pension account - *that* is the trigger, NOT what it goes in to.....

* there is always room for error

[Pit Pony]

On an afternoon out, we happened to walk into an art gallery, where my wife says "I'm thinking we should be investing in Art"

What the actual fk? This is from a woman who insisted i buy her friends MX5 for much more than it was worth, as it would be a solid investment. Like ballocks.

[AdamIM]

Sheepshanks said:

AdamIM said:

Sheepshanks, if you require some guidance, Nik or myself would be happy to discuss via email/phone.

Thanks, a discussion would be helpful. How should I arrange that?

HI,

PM sent

Regards

Adam

[CoopsIM]

superlightr said:

To clarify please.
We have a pension monthly payment set up to IM with various proportions to different funds and then a month or so later you get the govt adding their bit.

If you pay a lump sum into your pension held with IM and it is paid in as Cash/held is this the trigger for the Govt to add their bit? ie as its now in the pension as cash? or is the trigger when it gets moved from cash to say IM Index 100 etc.

I guess its when it enters the pension as cash.

thanks

Good morning

Yes, sitting in cash or invested into portfolio itself makes no difference. Relief is claimed either way.

Kindest regards

Coops

[Sheepshanks]

AdamIM said:

HI,

PM sent

Regards

Adam

Replied, thanks. Had to hunt for that account!

[Simpo Two]

Pit Pony said:

On an afternoon out, we happened to walk into an art gallery, where my wife says "I'm thinking we should be investing in Art"

What the actual fk? This is from a woman who insisted i buy her friends MX5 for much more than it was worth, as it would be a solid investment. Like ballocks.

I believe the attraction of Art is that it's CGT-exempt. Plus it looks better on your wall than a print-out of your GIA... probably.

I propose that CGT be balanced by CLB - Capital Loss Benefit, which pays 40% of any loss...