Artificial Intelligence companies surely? CES in Las Vegas is full of AI innovation and is the big talking point. I've put a few hundred into Man GLG Japan Core Alpha Fund and it's up about 7.6% this year. It's a Japanese AI fund. Anyone any thoughts?
What makes you say this ??? Do you know the companies it invests in ??
I'm a (fairly) long-term holder of this fund bought £8k worth @ 76p a unit 5 years ago and topped up another £5k @ 91p 3 years ago. Current unit price is 179p. So it's done fine (but doesn't pay much by way of income). As the name suggests - core alpha - it tends to invest in large mainstream companies (it's two largest holdings are Toyota and Honda) with its sector weighting being 21% banks and 15% automotive and only 6% into tech companies. I bought it because I couldn't see the Japanese stock market continuing to be in the doldrums and indeed, it's now at a 20-year high - but still only around 50% of its 1980s peak!
It was always the case that Japanese companies re-invested most of their profits into R&D. UK companies have traditionally paid dividends as this was the reason why investors bought shares back in the day. Weren't investing for growth particularly but for income. Many a UK company has had feisty annual shareholder meetings when they haven't increased the dividends.
An index is just a measure of averages. Its value is providing a benchmark for whatever you want to measure against it. Compare the success of your own stock selection or your managers skill in selecting the winners. The obsession is not in tracking the index it’s the ability to check if you are getting value from your active manager fees.
I accept that the more you diversify, the less you are able to make use of induces as a benchmark and the more you rely on returns relative to inflation or cash.
Trashing an index is like trashing a tape measure because it can’t tell you how much two feet weighs.
And there's the rub. There are 259 funds in the UK All Companies sector. The Vanguard UK All share tracker is ranked 116, so just above half way. It gained 13.3% last year whereas the best fund gained 41% and the worst lost 1.1%. Most fund managers charge around 1% pa, so if you can get the right fund (doesn't have to be the best - the 40th fund produced a 19.8% return) then you should be doing better than the market & better than 75% of fund managers.
No expert on these matters but Vanguard seem to have been there or thereabouts on the positive side for a few years now.
Who wants boring midtable investment performance though?
I tend to stick to funds mostly now in my SIPP, S&S ISA and Investment account all with Fidelity.
Main funds invested in currently are (a number for 5+ years);
BNY Melon Long Term Global Equity institutional, last two years up 26% and 14% Fidelity UK Select Fund, last two years up 9% and 16% Rathbourne Global Opportunities Fun, last two years up 17% and 20% Liontrust UK Growth Fund, last two years up 18% and 14% Legal & General Global Health & Pharm, last two years up 33% and 11% Legal & General US Index Trust, last two years up 12% and 10% Legal & General Global technology Index Trust, last two years up 36% and 25% Fidelity emerging markets Fund, last two years up 20% and 30% M&G Global Macro Bond Fund Select Fund, last two years up 25% and down 4%
They are the main funds that make up 80% of the overall but have about another 10 making up the remainder. I've switched in and out of a few around Brexit which made my return greater still.
I've all but stopped individual shares/trades as even if I had the time which I don't really I'd be hard pushed to beat the above growth/returns I think.
I tend to stick to funds mostly now in my SIPP, S&S ISA and Investment account all with Fidelity.
Main funds invested in currently are (a number for 5+ years);
BNY Melon Long Term Global Equity institutional, last two years up 26% and 14% Fidelity UK Select Fund, last two years up 9% and 16% Rathbourne Global Opportunities Fun, last two years up 17% and 20% Liontrust UK Growth Fund, last two years up 18% and 14% Legal & General Global Health & Pharm, last two years up 33% and 11% Legal & General US Index Trust, last two years up 12% and 10% Legal & General Global technology Index Trust, last two years up 36% and 25% Fidelity emerging markets Fund, last two years up 20% and 30% M&G Global Macro Bond Fund Select Fund, last two years up 25% and down 4%
They are the main funds that make up 80% of the overall but have about another 10 making up the remainder. I've switched in and out of a few around Brexit which made my return greater still.
I've all but stopped individual shares/trades as even if I had the time which I don't really I'd be hard pushed to beat the above growth/returns I think.
Unless you have any other asset classes in your portfolios I'd have to say that there is only 1 Fixed interest fund & so very overweight in Equities. A bit of diversification is always good - some commercial property, commodities, alternatives along with the fixed interest. If you don't want Gilts & bonds then you could try some absolute return funds as a hedge.
In that spirit, I'll share the funds that have done well for me: 1 year/3 year gains, although not held all for 3 years
Lindsell Train Global Equity D. 24.5/86.6 Love this fund, try to buy more on the dips but it doesnt really do dips, it just pauses a bit and then rumbles on. I don't know quite how they do it, but it's often positively referred
Fundsmith Equity Acc. 22.0/79.1 The fund manager Terry Smith is a veteran whom I used to listen to a lot on LBC back in the day
Then two where I have put my money where my Euro-mouth is, with pleasing results:
Baring German Growth Acc 27.3/78.6 JPM Europe Smaller Co.s Acc. 29.8/98.5
But it's not all good news because I am also in the Woodford fund ( -0.7/19.7). People ask if Neil Woodford has lost his touch, but I recently put a bit more in because I think he is playing a long game which will pay off eventually.
I am also building up my Vanguard funds because basically I'm persuaded that for mug punters like me this will be the most reliable way long term where we look for modest gains which are not eroded by fees.
Got some fund questions for you guys too, will post separately .
I tend to stick to funds mostly now in my SIPP, S&S ISA and Investment account all with Fidelity.
Main funds invested in currently are (a number for 5+ years);
BNY Melon Long Term Global Equity institutional, last two years up 26% and 14% Fidelity UK Select Fund, last two years up 9% and 16% Rathbourne Global Opportunities Fun, last two years up 17% and 20% Liontrust UK Growth Fund, last two years up 18% and 14% Legal & General Global Health & Pharm, last two years up 33% and 11% Legal & General US Index Trust, last two years up 12% and 10% Legal & General Global technology Index Trust, last two years up 36% and 25% Fidelity emerging markets Fund, last two years up 20% and 30% M&G Global Macro Bond Fund Select Fund, last two years up 25% and down 4%
They are the main funds that make up 80% of the overall but have about another 10 making up the remainder. I've switched in and out of a few around Brexit which made my return greater still.
I've all but stopped individual shares/trades as even if I had the time which I don't really I'd be hard pushed to beat the above growth/returns I think.
Unless you have any other asset classes in your portfolios I'd have to say that there is only 1 Fixed interest fund & so very overweight in Equities. A bit of diversification is always good - some commercial property, commodities, alternatives along with the fixed interest. If you don't want Gilts & bonds then you could try some absolute return funds as a hedge.
Thanks, I have other assets so although Equities make up a bit more than half (exc my house) I'm comfortable with that (see my PM).
@PragueAddick interesting you mention Lindsell, been in my watch list for a while, will give it a closer look. Dropped out of Woodford a while ago (didn’t have much in there), over rated IMHO just has a known name.
If you want low fee some of the L&G funds have about as low as they go.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Love premium bonds, my wife thinks i'm obsessed checking the app's every month! Generally get as good a return as a 1 year fix in the bank and makes it a bit more exciting.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
The manager of the Polar fund is an Addick....indeed his middle name is Charlton.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
The manager of the Polar fund is an Addick....indeed his middle name is Charlton.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
The manager of the Polar fund is an Addick....indeed his middle name is Charlton.
You're on a windup, right?
But any thoughts on his fund?
Not a wind up....I have been to the odd game with him and his Dad was a fan hence the name.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Love premium bonds, my wife thinks i'm obsessed checking the app's every month! Generally get as good a return as a 1 year fix in the bank and makes it a bit more exciting.
Edit, I can refer you if you like on the sovereigns, spend £250 and you get £10 off I think from memory (and of course so do I!)
Why might you think it's better to buy sovereigns than invest in the fund? Seems to me that the advantage of the fund is you can dip in and out, and not worry about any deposit boxes etc. I know a guy out here who started as a gold broker, and of course he talks about the advantages of being able to easily cross borders with all your gold bars stitched into the lining of your jacket - but he grew up with stories of the Soviet invasion in 1968...
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Love premium bonds, my wife thinks i'm obsessed checking the app's every month! Generally get as good a return as a 1 year fix in the bank and makes it a bit more exciting.
Edit, I can refer you if you like on the sovereigns, spend £250 and you get £10 off I think from memory (and of course so do I!)
Why might you think it's better to buy sovereigns than invest in the fund? Seems to me that the advantage of the fund is you can dip in and out, and not worry about any deposit boxes etc. I know a guy out here who started as a gold broker, and of course he talks about the advantages of being able to easily cross borders with all your gold bars stitched into the lining of your jacket - but he grew up with stories of the Soviet invasion in 1968...
Not saying the coins are better than the fund, but no CGT is a potential bonus if you can't put in a tax free wrapper. You can sell the coins same day for 98% of spot price. No annual management fee either. Funds probably easier, but less fun and CGT potential.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Love premium bonds, my wife thinks i'm obsessed checking the app's every month! Generally get as good a return as a 1 year fix in the bank and makes it a bit more exciting.
Edit, I can refer you if you like on the sovereigns, spend £250 and you get £10 off I think from memory (and of course so do I!)
Why might you think it's better to buy sovereigns than invest in the fund? Seems to me that the advantage of the fund is you can dip in and out, and not worry about any deposit boxes etc. I know a guy out here who started as a gold broker, and of course he talks about the advantages of being able to easily cross borders with all your gold bars stitched into the lining of your jacket - but he grew up with stories of the Soviet invasion in 1968...
Not saying the coins are better than the fund, but no CGT is a potential bonus if you can't put in a tax free wrapper. You can sell the coins same day for 98% of spot price. No annual management fee either. Funds probably easier, but less fun and CGT potential.
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Love premium bonds, my wife thinks i'm obsessed checking the app's every month! Generally get as good a return as a 1 year fix in the bank and makes it a bit more exciting.
Edit, I can refer you if you like on the sovereigns, spend £250 and you get £10 off I think from memory (and of course so do I!)
Why might you think it's better to buy sovereigns than invest in the fund? Seems to me that the advantage of the fund is you can dip in and out, and not worry about any deposit boxes etc. I know a guy out here who started as a gold broker, and of course he talks about the advantages of being able to easily cross borders with all your gold bars stitched into the lining of your jacket - but he grew up with stories of the Soviet invasion in 1968...
Not saying the coins are better than the fund, but no CGT is a potential bonus if you can't put in a tax free wrapper. You can sell the coins same day for 98% of spot price. No annual management fee either. Funds probably easier, but less fun and CGT potential.
I understand I'm CGT exempt, being tax non-resident.
Some general information for you investment guru's:
I was at an Investment Seminar this lunchtime & the main thoughts of the host (JP Morgan) regarding equities were:
UK. Neutral - Mid & small caps have done well over the last few years (outperforming the large FTSE100 companies) but going forward they see this slowing with GDP growth slowing too. Post Brexit the large FTSE100 companies may do better do to overseas earnings.
US. Positive. The recent tax cuts should feed through to higher profit growth (if spent on R&D etc) and so further growth can be expected. Recession could hit in 2.5 -3 years, so may want to take profits before then.
Europe. Positive. Returns in recent years have be held back by fears of political uncertainty but most have these issues have been abated & gains should be seen over the next few years.
Some general information for you investment guru's:
I was at an Investment Seminar this lunchtime & the main thoughts of the host (JP Morgan) regarding equities were:
UK. Neutral - Mid & small caps have done well over the last few years (outperforming the large FTSE100 companies) but going forward they see this slowing with GDP growth slowing too. Post Brexit the large FTSE100 companies may do better do to overseas earnings.
US. Positive. The recent tax cuts should feed through to higher profit growth (if spent on R&D etc) and so further growth can be expected. Recession could hit in 2.5 -3 years, so may want to take profits before then.
Europe. Positive. Returns in recent years have be held back by fears of political uncertainty but most have these issues have been abated & gains should be seen over the next few years.
hope this helps.
Interesting.
All my investments are US market ETFs, but quite diversified. I did pretty well last year, though if the whole lot had been in a Dow Jones tracker I'd have done much better. I'm about to open a fairly small GBP trading account and will probably look at a high dividend yield ETF and a UK/European value ETF. Unless anyone has any good ideas?
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
The manager of the Polar fund is an Addick....indeed his middle name is Charlton.
You're on a windup, right?
But any thoughts on his fund?
Not a wind up....I have been to the odd game with him and his Dad was a fan hence the name.
Interesting. I had the impression from his cv that you posted that he was an American who just might have thought it amusing to support a team with his name.
Some general information for you investment guru's:
I was at an Investment Seminar this lunchtime & the main thoughts of the host (JP Morgan) regarding equities were:
UK. Neutral - Mid & small caps have done well over the last few years (outperforming the large FTSE100 companies) but going forward they see this slowing with GDP growth slowing too. Post Brexit the large FTSE100 companies may do better do to overseas earnings.
US. Positive. The recent tax cuts should feed through to higher profit growth (if spent on R&D etc) and so further growth can be expected. Recession could hit in 2.5 -3 years, so may want to take profits before then.
Europe. Positive. Returns in recent years have be held back by fears of political uncertainty but most have these issues have been abated & gains should be seen over the next few years.
hope this helps.
Interesting the UK is only neutral but probably to be expected as Brexit approaches. Time to 'spread out' as our most famous manager of recent years would say
yes, if you ignore Woodford :-). The other thing is, I am still 67% in cash, (including 15% in P2P, and Premium bloody Bonds, waiting for the correction that has never arrived :-). So I've missed out on a good 2017 in that respect.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
The manager of the Polar fund is an Addick....indeed his middle name is Charlton.
You're on a windup, right?
But any thoughts on his fund?
Not a wind up....I have been to the odd game with him and his Dad was a fan hence the name.
Interesting. I had the impression from his cv that you posted that he was an American who just might have thought it amusing to support a team with his name.
Will pile in then :-)
PS. Isn't he rich enough to buy us yet? :-)
Alas not, but either way I don't think someone trained as an investor would find much to recommend in buying Charlton!
Some general information for you investment guru's:
I was at an Investment Seminar this lunchtime & the main thoughts of the host (JP Morgan) regarding equities were:
UK. Neutral - Mid & small caps have done well over the last few years (outperforming the large FTSE100 companies) but going forward they see this slowing with GDP growth slowing too. Post Brexit the large FTSE100 companies may do better do to overseas earnings.
US. Positive. The recent tax cuts should feed through to higher profit growth (if spent on R&D etc) and so further growth can be expected. Recession could hit in 2.5 -3 years, so may want to take profits before then.
Europe. Positive. Returns in recent years have be held back by fears of political uncertainty but most have these issues have been abated & gains should be seen over the next few years.
hope this helps.
Interesting the UK is only neutral but probably to be expected as Brexit approaches. Time to 'spread out' as our most famous manager of recent years would say
I'm personally quite bullish on UK equities (especially large caps) for the reason above (ie. high overseas earnings in the context of a weak GBP). They are fundamentally relatively cheap (versus other major indices) and pay a juicy dividend yield.
By virtue of their rather stodgy constituents (oil/gas, pharma, telecom etc.), UK equities will never provide the type of high octane returns potentially available elsewhere but the risk/reward seems quite favourable currently.
In that spirit, I'll share the funds that have done well for me: 1 year/3 year gains, although not held all for 3 years
Lindsell Train Global Equity D. 24.5/86.6 Love this fund, try to buy more on the dips but it doesnt really do dips, it just pauses a bit and then rumbles on. I don't know quite how they do it, but it's often positively referred
Fundsmith Equity Acc. 22.0/79.1 The fund manager Terry Smith is a veteran whom I used to listen to a lot on LBC back in the day
Then two where I have put my money where my Euro-mouth is, with pleasing results:
Baring German Growth Acc 27.3/78.6 JPM Europe Smaller Co.s Acc. 29.8/98.5
But it's not all good news because I am also in the Woodford fund ( -0.7/19.7). People ask if Neil Woodford has lost his touch, but I recently put a bit more in because I think he is playing a long game which will pay off eventually.
I am also building up my Vanguard funds because basically I'm persuaded that for mug punters like me this will be the most reliable way long term where we look for modest gains which are not eroded by fees.
Got some fund questions for you guys too, will post separately .
Lindsell Train fund based on Buffett philosophy - buy a few shares of companies with conviction. Companies with long term cash generation potential that you know inside out, and hold them. It has around 30 holdings, when less than 70 is seen as aggressive, so is regarded as very high risk. It's all about stock picking, you are putting 100% trust in the individual manager skill and abandoning any downside protection provided by diversification. The managers have proved their worth and bought large stable corporations in the right sectors that have delivered. Large mainstream investment houses don't have the ability to retain the quality of managers able to run these type of conviction strategies, they leave and set up there own investment company.
Neil Woodford holds more stocks but still relatively few in terms of diversification. His blip is down to one holding crashing, showing the risk of the high conviction strategy where a few stocks underperforming can wreck the figures, some things are just not foreseeable. It's why over the long term so many high performance funds experience unforeseen setbacks that actually make their returns revert closer to the average fund. It comes down to timing of your entry and exit for the ones that have periods shooting the lights out.
As for Vanguard funds and "modest gains", a bit misleading. They are low cost trackers and quasi trackers. It means they are cheap and will deliver close to market returns. You are not paying as much as for the Lindsell Train fund because no one is applying any skill, and you are not immune from the full impact of a market crash. Nor are you immune from negative returns. A market can only "gain" against something you are benchmarking it against and every individual can choose their own benchmark - another asset class, inflation +, cash +4% etc etc. so you must ask yourself what is the base line against which you are expecting the Vanguard fund to make a "modest gain".
A low volatility fund which protects against full market exposure, and the least risk of negative returns over a cycle is a diversified strategic asset allocation fund full of different assets classes with as little correlation to one another as can be achieved. So when one market is booming another is flat or falling and vice versa . They are expensive because there is a lot of monitoring and rebalancing going on. But you are not paying for high returns, you are paying for the low probability of loss of capital accompanied by a modest positive return. It is more deserving of the description of delivering "modest gains" since they are absolute returns not correlated to any index or benchmark. As it doesn't try and track any index, @newyorkaddick would like them except they are not sexy enough.
My issue with those types of funds is not their lack of sexiness but the fact that they rely upon backward looking correlation models which may not be robust going forward.
Most obviously there is an empirical assumption that bonds and equities are negatively correlated, but the correlation has been creeping up in recent years and may spike at a most inopportune time (an inflation scare would be very negative for both asset classes and seems an increasingly likely outcome in 2018/19).
Comments
Who wants boring midtable investment performance though?
Main funds invested in currently are (a number for 5+ years);
BNY Melon Long Term Global Equity institutional, last two years up 26% and 14%
Fidelity UK Select Fund, last two years up 9% and 16%
Rathbourne Global Opportunities Fun, last two years up 17% and 20%
Liontrust UK Growth Fund, last two years up 18% and 14%
Legal & General Global Health & Pharm, last two years up 33% and 11%
Legal & General US Index Trust, last two years up 12% and 10%
Legal & General Global technology Index Trust, last two years up 36% and 25%
Fidelity emerging markets Fund, last two years up 20% and 30%
M&G Global Macro Bond Fund Select Fund, last two years up 25% and down 4%
They are the main funds that make up 80% of the overall but have about another 10 making up the remainder. I've switched in and out of a few around Brexit which made my return greater still.
I've all but stopped individual shares/trades as even if I had the time which I don't really I'd be hard pushed to beat the above growth/returns I think.
In that spirit, I'll share the funds that have done well for me: 1 year/3 year gains, although not held all for 3 years
Lindsell Train Global Equity D. 24.5/86.6
Love this fund, try to buy more on the dips but it doesnt really do dips, it just pauses a bit and then rumbles on. I don't know quite how they do it, but it's often positively referred
Fundsmith Equity Acc. 22.0/79.1
The fund manager Terry Smith is a veteran whom I used to listen to a lot on LBC back in the day
Then two where I have put my money where my Euro-mouth is, with pleasing results:
Baring German Growth Acc 27.3/78.6
JPM Europe Smaller Co.s Acc. 29.8/98.5
But it's not all good news because I am also in the Woodford fund ( -0.7/19.7). People ask if Neil Woodford has lost his touch, but I recently put a bit more in because I think he is playing a long game which will pay off eventually.
I am also building up my Vanguard funds because basically I'm persuaded that for mug punters like me this will be the most reliable way long term where we look for modest gains which are not eroded by fees.
Got some fund questions for you guys too, will post separately .
@PragueAddick interesting you mention Lindsell, been in my watch list for a while, will give it a closer look. Dropped out of Woodford a while ago (didn’t have much in there), over rated IMHO just has a known name.
If you want low fee some of the L&G funds have about as low as they go.
A couple I am looking at, wondering what people think:
Polar Capital Technology Fund. This was suggested by Motley Fool as a way to obliquely invest in the crypto thing, on the basis that the big tech co.s which the fund invests in are all moving in on the technology in various ways.
Keep thinking about having a little bit of gold, but very wary of holding the physical stuff. So this ETC is backed by physical gold holdings. A way to be in gold without the high fees, cost of storing safely or hiding it in your house and then forgetting where you put it?
Sovereigns are a good gold purchase, no CGT or VAT. A safety deposit box at Metro bank is reasonably cheap (from £200 a year). These are a good buy at the moment; https://www.thegoldbullion.co.uk/buy-gold-sovereigns/investment-bundle-elizabeth-ii-pre-decimal-gold-sovereigns/
Edit, I can refer you if you like on the sovereigns, spend £250 and you get £10 off I think from memory (and of course so do I!)
But any thoughts on his fund?
I was at an Investment Seminar this lunchtime & the main thoughts of the host (JP Morgan) regarding equities were:
UK. Neutral - Mid & small caps have done well over the last few years (outperforming the large FTSE100 companies) but going forward they see this slowing with GDP growth slowing too. Post Brexit the large FTSE100 companies may do better do to overseas earnings.
US. Positive. The recent tax cuts should feed through to higher profit growth (if spent on R&D etc) and so further growth can be expected. Recession could hit in 2.5 -3 years, so may want to take profits before then.
Europe. Positive. Returns in recent years have be held back by fears of political uncertainty but most have these issues have been abated & gains should be seen over the next few years.
hope this helps.
All my investments are US market ETFs, but quite diversified. I did pretty well last year, though if the whole lot had been in a Dow Jones tracker I'd have done much better. I'm about to open a fairly small GBP trading account and will probably look at a high dividend yield ETF and a UK/European value ETF. Unless anyone has any good ideas?
Will pile in then :-)
PS. Isn't he rich enough to buy us yet? :-)
By virtue of their rather stodgy constituents (oil/gas, pharma, telecom etc.), UK equities will never provide the type of high octane returns potentially available elsewhere but the risk/reward seems quite favourable currently.
Neil Woodford holds more stocks but still relatively few in terms of diversification. His blip is down to one holding crashing, showing the risk of the high conviction strategy where a few stocks underperforming can wreck the figures, some things are just not foreseeable. It's why over the long term so many high performance funds experience unforeseen setbacks that actually make their returns revert closer to the average fund. It comes down to timing of your entry and exit for the ones that have periods shooting the lights out.
As for Vanguard funds and "modest gains", a bit misleading. They are low cost trackers and quasi trackers. It means they are cheap and will deliver close to market returns. You are not paying as much as for the Lindsell Train fund because no one is applying any skill, and you are not immune from the full impact of a market crash. Nor are you immune from negative returns. A market can only "gain" against something you are benchmarking it against and every individual can choose their own benchmark - another asset class, inflation +, cash +4% etc etc. so you must ask yourself what is the base line against which you are expecting the Vanguard fund to make a "modest gain".
A low volatility fund which protects against full market exposure, and the least risk of negative returns over a cycle is a diversified strategic asset allocation fund full of different assets classes with as little correlation to one another as can be achieved. So when one market is booming another is flat or falling and vice versa . They are expensive because there is a lot of monitoring and rebalancing going on. But you are not paying for high returns, you are paying for the low probability of loss of capital accompanied by a modest positive return. It is more deserving of the description of delivering "modest gains" since they are absolute returns not correlated to any index or benchmark. As it doesn't try and track any index, @newyorkaddick would like them except they are not sexy enough.
Most obviously there is an empirical assumption that bonds and equities are negatively correlated, but the correlation has been creeping up in recent years and may spike at a most inopportune time (an inflation scare would be very negative for both asset classes and seems an increasingly likely outcome in 2018/19).