Your questions answered Vol 2 - IM Private Clients
Discussion
OnTheBreadline said:
Do we need to book an appointment/ring and speak to Nick/Coops/whoever it is that posts cat photos (or others I've missed) in order to do this?
Cards on the table, I've got a SIPP with you, I want to retire at 65 (20 years time) with the biggest pot possible, but my pot is currently considerably smaller than the initial investment made a couple of years ago... Is this new service something that I could make benefit from?
(As I've alluded to before, I'm about as knowledgable at this game as I am at writing a nuclear engineering thesis in Hindi!)
Similarish scenario for me (with regards to objective). Cards on the table, I've got a SIPP with you, I want to retire at 65 (20 years time) with the biggest pot possible, but my pot is currently considerably smaller than the initial investment made a couple of years ago... Is this new service something that I could make benefit from?
(As I've alluded to before, I'm about as knowledgable at this game as I am at writing a nuclear engineering thesis in Hindi!)
JulianPH said:
The first bit mate!
Pick the best bits, put them in a pot, weight this pot to suit your circumstances and then produce the highest returns we can within those parameters.
Index trackers will be the base because we like them, stock selection will be the key to higher than market returns because we really like that too.
The aim is that the combination of the two approaches does indeed smooth returns out, but not by flattening them, which is usually the case when smoothing is sought/applied.
Equally, seeing just one value per pot, rather than multiple values of different components give a very visual smoothing effect without restricting returns at all.
Ok thanks for the reply but I don't understand how returns could be higher if you've got a base of trackers plus other funds all being spun around at the same time in different weightings according to situation. Surely the average of that will always be lower than just using whichever specific funds suit the scenario? Assuming you want to select the funds yourself, that is. I totally understand if people want a point-and-shoot investment. Are you saying you're effectively going to be timing the market by swapping, changing, weighing or omitting certain elements? Except with a lot more precision because that's what your business is about! Perhaps 'timing' is the wrong word, but you can see the idea behind my question hopefully.Pick the best bits, put them in a pot, weight this pot to suit your circumstances and then produce the highest returns we can within those parameters.
Index trackers will be the base because we like them, stock selection will be the key to higher than market returns because we really like that too.
The aim is that the combination of the two approaches does indeed smooth returns out, but not by flattening them, which is usually the case when smoothing is sought/applied.
Equally, seeing just one value per pot, rather than multiple values of different components give a very visual smoothing effect without restricting returns at all.
JulianPH said:
Sure! Well I can try anyway!
What it means is that you can access everything IM has to offer, but without having to give it any thought or involvement. We do it all for you.
The financial and tax planning side of things remains identical, but the investments themselves are all completely managed for you and drawn from our best ideas in line with the circumstances of the day.
So you can fire and forget, put it on auto pilot, wash and go (ok, probably not the last one!).
You give us the parameters to work within (current age, target dates for access, income or growth requitements at those dates) and we take this and manage everything for you using our best ideas.
To use a really rubish car analogy, we can make investment providers early day taxis:
When you get in a cab for a very long journey you can chose the vehicle(s), but after this you must then tell the driver what roads you want to go downto reach your destination and he can drive you down them, managing the fiddly bits for you. This is pretty much how fund selection works.
Alternatively, you can now just tell him where you need to be and at what time, then let him select the best vehicles, manage the best routes and avoid the worst of the traffic where possible for you. That is how IML works.
I told you it was a rubbish analogy, but because I can't stop when I try to do this here it is in fewer words: Sat Nav replacing your AA road map!
Awesome, thanks for that! I think I need to schedule a chat with young Nicholas soon.What it means is that you can access everything IM has to offer, but without having to give it any thought or involvement. We do it all for you.
The financial and tax planning side of things remains identical, but the investments themselves are all completely managed for you and drawn from our best ideas in line with the circumstances of the day.
So you can fire and forget, put it on auto pilot, wash and go (ok, probably not the last one!).
You give us the parameters to work within (current age, target dates for access, income or growth requitements at those dates) and we take this and manage everything for you using our best ideas.
To use a really rubish car analogy, we can make investment providers early day taxis:
When you get in a cab for a very long journey you can chose the vehicle(s), but after this you must then tell the driver what roads you want to go downto reach your destination and he can drive you down them, managing the fiddly bits for you. This is pretty much how fund selection works.
Alternatively, you can now just tell him where you need to be and at what time, then let him select the best vehicles, manage the best routes and avoid the worst of the traffic where possible for you. That is how IML works.
I told you it was a rubbish analogy, but because I can't stop when I try to do this here it is in fewer words: Sat Nav replacing your AA road map!
Gallons Per Mile said:
JulianPH said:
The first bit mate!
Pick the best bits, put them in a pot, weight this pot to suit your circumstances and then produce the highest returns we can within those parameters.
Index trackers will be the base because we like them, stock selection will be the key to higher than market returns because we really like that too.
The aim is that the combination of the two approaches does indeed smooth returns out, but not by flattening them, which is usually the case when smoothing is sought/applied.
Equally, seeing just one value per pot, rather than multiple values of different components give a very visual smoothing effect without restricting returns at all.
Ok thanks for the reply but I don't understand how returns could be higher if you've got a base of trackers plus other funds all being spun around at the same time in different weightings according to situation. Surely the average of that will always be lower than just using whichever specific funds suit the scenario? Assuming you want to select the funds yourself, that is. I totally understand if people want a point-and-shoot investment. Are you saying you're effectively going to be timing the market by swapping, changing, weighing or omitting certain elements? Except with a lot more precision because that's what your business is about! Perhaps 'timing' is the wrong word, but you can see the idea behind my question hopefully.Pick the best bits, put them in a pot, weight this pot to suit your circumstances and then produce the highest returns we can within those parameters.
Index trackers will be the base because we like them, stock selection will be the key to higher than market returns because we really like that too.
The aim is that the combination of the two approaches does indeed smooth returns out, but not by flattening them, which is usually the case when smoothing is sought/applied.
Equally, seeing just one value per pot, rather than multiple values of different components give a very visual smoothing effect without restricting returns at all.
As the tracker base mirrors the markets, the stock selected interwoven with this is where we seek to outperform the market overall. Sometimes we will and sometimes we won't (anoyone who says otherwise is lying!), but we are pretty good at outperforming over the loger term (and shorter term when it came to PHR).
So the average will only be lower if our stock selection is consistantly underperforming the markets themselves (in which case I must go away and commit Hari Kari!).
So we are not attempting to time the markets by swapping and changing weightings or omitting certain elements - timing the markets is a fools errand - we are aiming to out perform the markets by using the markets themselves as a base and then adding to this particular stocks where we like either the long term or shorter term opportunities to be had.
Sorry, just read "perhaps timeing is the wong word". Yes I can see the idea and if you replace 'timing the market' with 'structuring your market exposure' then yes, that is it!
The current situation is that we offer the market (IM Index), managed markets (IM Optimum and stock selection (PH Portfolios). what IML does is bring all of that together at underlying component level and then hold and manage everything for you, rather than you doinging this yourself by picking from these indiviudal portfolios.
I hope that makes more sense!
JulianPH said:
I think I better understand where you are coming from now Criag.
As the tracker base mirrors the markets, the stock selected interwoven with this is where we seek to outperform the market overall. Sometimes we will and sometimes we won't (anoyone who says otherwise is lying!), but we are pretty good at outperforming over the loger term (and shorter term when it came to PHR).
So the average will only be lower if our stock selection is consistantly underperforming the markets themselves (in which case I must go away and commit Hari Kari!).
So we are not attempting to time the markets by swapping and changing weightings or omitting certain elements - timing the markets is a fools errand - we are aiming to out perform the markets by using the markets themselves as a base and then adding to this particular stocks where we like either the long term or shorter term opportunities to be had.
Sorry, just read "perhaps timeing is the wong word". Yes I can see the idea and if you replace 'timing the market' with 'structuring your market exposure' then yes, that is it!
The current situation is that we offer the market (IM Index), managed markets (IM Optimum and stock selection (PH Portfolios). what IML does is bring all of that together at underlying component level and then hold and manage everything for you, rather than you doinging this yourself by picking from these indiviudal portfolios.
I hope that makes more sense!
sounds interesting. I may be using the term wrongly but is what you are suggesting "Factoring Investing"?As the tracker base mirrors the markets, the stock selected interwoven with this is where we seek to outperform the market overall. Sometimes we will and sometimes we won't (anoyone who says otherwise is lying!), but we are pretty good at outperforming over the loger term (and shorter term when it came to PHR).
So the average will only be lower if our stock selection is consistantly underperforming the markets themselves (in which case I must go away and commit Hari Kari!).
So we are not attempting to time the markets by swapping and changing weightings or omitting certain elements - timing the markets is a fools errand - we are aiming to out perform the markets by using the markets themselves as a base and then adding to this particular stocks where we like either the long term or shorter term opportunities to be had.
Sorry, just read "perhaps timeing is the wong word". Yes I can see the idea and if you replace 'timing the market' with 'structuring your market exposure' then yes, that is it!
The current situation is that we offer the market (IM Index), managed markets (IM Optimum and stock selection (PH Portfolios). what IML does is bring all of that together at underlying component level and then hold and manage everything for you, rather than you doinging this yourself by picking from these indiviudal portfolios.
I hope that makes more sense!
with the active management and ability to have some cash to move in and out at short notice into "sentimental" or very short term current things to help give timely boosts?
Just comparing the my plan to say have 40% of my funds in say IM index tracker 100 or 80, 30% in IM GG and 30% split in PHE and PHT for instance.
Edited by superlightr on Friday 6th May 09:44
Edited by superlightr on Friday 6th May 09:45
JulianPH said:
IML will be different for each individual based upon these factors, you see!
You then have to factor in that for everyone it is a moving feast, so what you may have today is likely to be different to what you had a year ago.
So whilst I fully see and understand your point here, you can't really apply a one year snapshot to a long term investment and generate anything meaningful when given all of the factors above.
That's a very fair point, one I realised but hoped could be overcome somehow to give people comparisons.You then have to factor in that for everyone it is a moving feast, so what you may have today is likely to be different to what you had a year ago.
So whilst I fully see and understand your point here, you can't really apply a one year snapshot to a long term investment and generate anything meaningful when given all of the factors above.
Presumably then this will be one investment you can't publish a performance graph for, because there is no one IML mix...
You may have to devise a 'typical/illustration' graph eventually because people can't really invest if they have no idea how it performs...!
When choosing my options I shall of course tick the '100% growth per year' box, and thank you in advance
AdamIM said:
Hi All,
Vertex Pharma hands in its report card after close tonight. They have a very solid business and have been particularly resilient during the recent turmoil.
When we wanted to add exposure to Biotech/Pharma, whilst we identified a few potential candidates, the very nature of the industry is characterised by huge cash spend on research/trials (100's of millions) in the hope of finding a new 'Blockbuster' drug, a drug that returns north of $1B in revenue. A very Boom/Bust, more risky environment. Get it right and happy days, get it wrong and many of these businesses go bust or need to raise further capital. Vertex already has its Blockbuster pipeline and they generate a lot of cash, which allows them to support ongoing research.
The main drugs are Trikafta+ Symdeko+Orkambi(patents for +15 years), cystic fibrosis treatments which generates $6B in revenues annually, and growing. Each is more suitable for different patient age groups.
The company have other potential drugs in the pipeline, at various trial stages, including gene replacement therapies which, if successful would be transformative in creating 'new medicine'. Being able to replace faulty genes or add new ones such that the body can fight disease without drugs. Vertex hires the very brightest minds and is making good progress in these areas and whilst it could take years to bring to market, they can lean on their substantial blockbuster drugs to continue growing.
Vertex has a history of 20% annual earnings growth and trades at a very reasonable PE of 15.
The market expects adjusted Q1/2022 EPS of $3.54 and Revenue of $2.01B
Vertex Pharma hands in its report card after close tonight. They have a very solid business and have been particularly resilient during the recent turmoil.
When we wanted to add exposure to Biotech/Pharma, whilst we identified a few potential candidates, the very nature of the industry is characterised by huge cash spend on research/trials (100's of millions) in the hope of finding a new 'Blockbuster' drug, a drug that returns north of $1B in revenue. A very Boom/Bust, more risky environment. Get it right and happy days, get it wrong and many of these businesses go bust or need to raise further capital. Vertex already has its Blockbuster pipeline and they generate a lot of cash, which allows them to support ongoing research.
The main drugs are Trikafta+ Symdeko+Orkambi(patents for +15 years), cystic fibrosis treatments which generates $6B in revenues annually, and growing. Each is more suitable for different patient age groups.
The company have other potential drugs in the pipeline, at various trial stages, including gene replacement therapies which, if successful would be transformative in creating 'new medicine'. Being able to replace faulty genes or add new ones such that the body can fight disease without drugs. Vertex hires the very brightest minds and is making good progress in these areas and whilst it could take years to bring to market, they can lean on their substantial blockbuster drugs to continue growing.
Vertex has a history of 20% annual earnings growth and trades at a very reasonable PE of 15.
The market expects adjusted Q1/2022 EPS of $3.54 and Revenue of $2.01B
Vertex had a very solid quarter, coming in with $2.1B in revenues and $3.52 eps, a 2 c miss although their effective tax rate was 1% higher which accounts for 3.5 c. They ended the period with $8.2b in cash and securities available for sale and have zero debt. Rapid uptake of their blockbuster drug, Trikafta continues as it is rolled out globally.Addressing 45,000 patients so far.There are 30,000 additional patients to address in markets yet to gain approval and it is expected 5,000 of these will be picked up in the H2(half 2) of 2022. The drug must be taken for life and the cost is an eye watering USD 300,000 per year (1 patient), hence the time taken for insurers and NHS types approving its use.
This is a 1 week supply and costs $5,800 which is very expensive and yes the company makes very good margins but not excessively so. Lets not forget that the company invested Billions in its development and it could have flopped. Difficult to say exactly but I would estimate that the cost to produce 1 box is in the region of $1,500 which is an indication of the highly complex nature of next generation drug manufacturing.
Vertex valuation is supported by this single drug. Their pipeline for further medicines very strong and we think this business will make some significant medical breakthroughs in the years ahead. Helping people and rewarding shareholders along the way
Edited by AdamIM on Friday 6th May 10:02
superlightr said:
sounds interesting. I may be using the term wrongly but is what you are suggesting "Factoring Investing"?
with the active management and ability to have some cash to move in and out at short notice into "sentimental" or very short term current things to help give timely boosts?
Just comparing the my plan to say have 40% of my funds in say IM index tracker 100 or 80, 30% in IM GG and 30% split in PHE and PHT for instance.
Morning Jameswith the active management and ability to have some cash to move in and out at short notice into "sentimental" or very short term current things to help give timely boosts?
Just comparing the my plan to say have 40% of my funds in say IM index tracker 100 or 80, 30% in IM GG and 30% split in PHE and PHT for instance.
No, there is no factoring involved, it is just good old fashioned analogue investment management, so active management moving from different holdings/stocks as we consider appropriate. The only cash element will be the usual very small amount, otherwise it is wasted funds!
Of course we can move at very short notice into holdings that could offer an obvious boost, but this will be at the expense of another position. Happily it generally works that such movment gies a double whammy.
Take out PHE move out of Unilever and into United Health. United Health soared - which was what we expected - but Unilever sank at the same time. So not only did we get the gain we dodged the loss - the double whammy!
What you plan does is very much what IML will do for you, but with you responsible for any changes between our portfolios, rather than us being responsible for these at individual holdings level.
Simpo Two said:
JulianPH said:
IML will be different for each individual based upon these factors, you see!
You then have to factor in that for everyone it is a moving feast, so what you may have today is likely to be different to what you had a year ago.
So whilst I fully see and understand your point here, you can't really apply a one year snapshot to a long term investment and generate anything meaningful when given all of the factors above.
That's a very fair point, one I realised but hoped could be overcome somehow to give people comparisons.You then have to factor in that for everyone it is a moving feast, so what you may have today is likely to be different to what you had a year ago.
So whilst I fully see and understand your point here, you can't really apply a one year snapshot to a long term investment and generate anything meaningful when given all of the factors above.
Presumably then this will be one investment you can't publish a performance graph for, because there is no one IML mix...
You may have to devise a 'typical/illustration' graph eventually because people can't really invest if they have no idea how it performs...!
When choosing my options I shall of course tick the '100% growth per year' box, and thank you in advance
We can produce example charts of historic past persormance, but the ever changing nature of IML makes them of little use. It is handy therefore to remember that past performance is indeed no indication of future returns.
So whilst we can show how it could have performed, it is not possible for us, or indeed anyone else, to show how it will perform!
Be carefull with that 100% growth option box mate, it is our numbskull test. I figure anyone daft enough to select it isn't going to miss their money, so it goes straight though to my bookie's account and onto the 2 o'clock at Aintree.
Cheers!
JulianPH said:
I told you I would get it into two sentences...
From our new website coming in a couple of weeks. Text just added this morning!
Cheers
Julian
nice. but where is the little rubber duck or toy boat?From our new website coming in a couple of weeks. Text just added this morning!
Cheers
Julian
Hi Julian and team. Thanks for your earlier reply.
How does it work in regards to wanting to;
wanting to retire next year and looking for a drawdown at end of each year of say 4%
Having 3.5 years of cash over and above investment capital in case of bad sequencing/poor performance to replace/prop up that 4% (plus some extra assets to sell if really needed ie 911 & downsize)
Hoping to have the investments until I die say in 35/39 years but happy with a diminishing balance.
How does IM tailor the product to try and meet my aims?
I presume that as only a small % is used/needed then the majority will be invested within higher risk longer term products from IM within the IML holdings?
its the time line and adjustments I guess im unclear over is the "risk" level adjusted per person based upon what they ask for or done automatically? eg Im happy with a high risk as I have other stuff to sell.
Edited by superlightr on Friday 6th May 12:43
Edited by superlightr on Friday 6th May 12:44
JulianPH said:
I told you I would get it into two sentences...
From our new website coming in a couple of weeks. Text just added this morning!
Cheers
Julian
Was that taken in your swimming pool? From our new website coming in a couple of weeks. Text just added this morning!
Cheers
Julian
Slight spelling mistake with "decision" in case you miss it! I'll take the full fat "Ferrari next year" option, please
JulianPH said:
I think I better understand where you are coming from now Criag.
As the tracker base mirrors the markets, the stock selected interwoven with this is where we seek to outperform the market overall. Sometimes we will and sometimes we won't (anoyone who says otherwise is lying!), but we are pretty good at outperforming over the loger term (and shorter term when it came to PHR).
So the average will only be lower if our stock selection is consistantly underperforming the markets themselves (in which case I must go away and commit Hari Kari!).
So we are not attempting to time the markets by swapping and changing weightings or omitting certain elements - timing the markets is a fools errand - we are aiming to out perform the markets by using the markets themselves as a base and then adding to this particular stocks where we like either the long term or shorter term opportunities to be had.
Sorry, just read "perhaps timeing is the wong word". Yes I can see the idea and if you replace 'timing the market' with 'structuring your market exposure' then yes, that is it!
The current situation is that we offer the market (IM Index), managed markets (IM Optimum and stock selection (PH Portfolios). what IML does is bring all of that together at underlying component level and then hold and manage everything for you, rather than you doinging this yourself by picking from these indiviudal portfolios.
I hope that makes more sense!
Yep, I'm getting there, thanks!As the tracker base mirrors the markets, the stock selected interwoven with this is where we seek to outperform the market overall. Sometimes we will and sometimes we won't (anoyone who says otherwise is lying!), but we are pretty good at outperforming over the loger term (and shorter term when it came to PHR).
So the average will only be lower if our stock selection is consistantly underperforming the markets themselves (in which case I must go away and commit Hari Kari!).
So we are not attempting to time the markets by swapping and changing weightings or omitting certain elements - timing the markets is a fools errand - we are aiming to out perform the markets by using the markets themselves as a base and then adding to this particular stocks where we like either the long term or shorter term opportunities to be had.
Sorry, just read "perhaps timeing is the wong word". Yes I can see the idea and if you replace 'timing the market' with 'structuring your market exposure' then yes, that is it!
The current situation is that we offer the market (IM Index), managed markets (IM Optimum and stock selection (PH Portfolios). what IML does is bring all of that together at underlying component level and then hold and manage everything for you, rather than you doinging this yourself by picking from these indiviudal portfolios.
I hope that makes more sense!
Another couple of questions have spawned from this:
Will IML be buying individual stocks not found in other existing portfolios, or if you see an opportunity will the stock be added IMO and the weighted up in IML?
Are you expecting IML to outperform the individual portfolios because it's taking all the best bits and putting them in one pot?
Cheers
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