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  • FIRST POST
    • TBC15
    • By TBC15 29th Sep 17, 1:37 PM
    • 265Posts
    • 87Thanks
    TBC15
    Great British Invest off or Passive V Active Discussion
    • #1
    • 29th Sep 17, 1:37 PM
    Great British Invest off or Passive V Active Discussion 29th Sep 17 at 1:37 PM
    For those who are curious to compare their Passive or Active investment strategies I’m starting a new thread today with monthly updates (Bottom lines only in £).

    Portfolios rebased to £100000 starting on the last active day of trading on the 29th Sept as a start point and constituents followable on Trustnet .

    Ideally the portfolios should mirror the investor’s actual holdings as near as possible with Trustnet. This is not really a fantasy league.

    If you are interested please leave details of your Portfolios here
    http://forums.moneysavingexpert.com/showthread.php?p=73192270#post73192270

    and monthly updates here.
    http://forums.moneysavingexpert.com/showthread.php?p=73192349#post73192349

    It should be interesting to see how strategies fair over the months ahead.
    Last edited by TBC15; 29-09-2017 at 2:10 PM. Reason: Links
Page 3
    • enthusiasticsaver
    • By enthusiasticsaver 1st Oct 17, 9:32 PM
    • 4,852 Posts
    • 9,173 Thanks
    enthusiasticsaver
    I have invested in VLS60 for the last four years but have just added to my portfolio units in the Artemis monthly distribution income fund which is of course active so will be comparing the two over the next five years as I expect not to have to touch either in that time. Both multi assets but of course different asset allocations so not as straightforward as active v passive.

    Of course one is income and the other accumulation so not going to be that easy to judge their performance against each other.
    1 week to go until early retirement. Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • ams25
    • By ams25 1st Oct 17, 9:46 PM
    • 102 Posts
    • 87 Thanks
    ams25
    If all the investors in the world turned up for this thread, we would find that their average return was the market average. That's just logic.

    You can subtract the passive investors, who are simply tracking the average. And conclude that the average return of everybody who actively chooses their investments is, mathematically, the market average.

    That said, I find it endlessly fascinating to see how people stash their hard-earned. So please, crack on��
    Originally posted by Ray Singh-Blue

    but what's missing is that there are hundreds/thousands of active funds that consisently perform poorly or just averagely yet have billions invested. These skew the numbers. that means that there must be some - and relatively fewer - that perform better, even much better. If you find these why would you not do better than average. The fundsmiths, woodfords, hargreaves, tullocks, Shiozumis etc.

    I agree that there are many many poor performing active funds and you are better off with a tracker than those funds...and for those not able or inclined to reasearch the Actives that do add value then again trackers are probably best. But what I don't get is the logic that says that because there are many poor active funds it is better to go with passives, instead of an approach that says there are good actives but you need to do some homework to find them.

    Look at my vls60 vs active comparisons on the updates thread. That's worthwhile outperformance in my opinion.
    Last edited by ams25; 01-10-2017 at 9:56 PM.
    • bostonerimus
    • By bostonerimus 1st Oct 17, 9:52 PM
    • 1,226 Posts
    • 684 Thanks
    bostonerimus
    I agree that there are many many poor performing active funds and you are better off with a tracker than those funds...and for those not able or inclined to reasearch the Actives that do add value then again trackers are probably best. But what I don't get is the logic that says that because there are many poor active funds it is better to go with passives, instead of an approach that says there are good actives bit you need to do some homework to find them.

    Look at my vls60 vs active comparisons on the updates thread. That's worthwile outperformance in my opinion.
    Originally posted by ams25
    If you can consistently choose benchmark beating active funds over a 30 or even 60 year investing term then your logic is perfectly correct.
    Misanthrope in search of similar for mutual loathing
    • Audaxer
    • By Audaxer 2nd Oct 17, 9:29 AM
    • 655 Posts
    • 295 Thanks
    Audaxer
    But what I don't get is the logic that says that because there are many poor active funds it is better to go with passives, instead of an approach that says there are good actives but you need to do some homework to find them.

    Look at my vls60 vs active comparisons on the updates thread. That's worthwhile outperformance in my opinion.
    Originally posted by ams25
    Yes, your active portfolio has done very well compared to the VLS60, but if I invested in that exact same portfolio today and compared it to my VLS performance from today, there is no guarantee that it will do better long term. The active funds might perform particularly poorly in a crash and some active fund managers might make the wrong decisions, and you as portfolio manager will have to decide what action if any to take and you may make the wrong decisions to hold or sell. Some investors will be more contented to stick with the VLS60 satisfied than in the long term they will have the sort of returns they are happy with.

    It's not just a case of being able to pick the right active funds, but being able to make the right decisions in managing the portfolio, which is my view makes it more difficult to get it right.
    • Linton
    • By Linton 2nd Oct 17, 9:31 AM
    • 8,636 Posts
    • 8,610 Thanks
    Linton
    but what's missing is that there are hundreds/thousands of active funds that consisently perform poorly or just averagely yet have billions invested....
    Originally posted by ams25
    Not just active funds. Look at all the people who could be investing globally but choose to hold a FTSE100 tracker. And those who invest in VLS100 which has underperformed the global indexes every year since it started. All these people create counterweight space above the global all investor average. Many thanks!

    One could carry this theme further. Even those people who have invested in what they think is a global tracker may well be in the underperforming group since these funds tend to be limited in the companies they can consider - eg by geography or size. It will be interesting to see how the new Vanguard Global all-cap fund performs.
    • bostonerimus
    • By bostonerimus 2nd Oct 17, 1:05 PM
    • 1,226 Posts
    • 684 Thanks
    bostonerimus
    Not just active funds. Look at all the people who could be investing globally but choose to hold a FTSE100 tracker. And those who invest in VLS100 which has underperformed the global indexes every year since it started. All these people create counterweight space above the global all investor average. Many thanks!

    One could carry this theme further. Even those people who have invested in what they think is a global tracker may well be in the underperforming group since these funds tend to be limited in the companies they can consider - eg by geography or size. It will be interesting to see how the new Vanguard Global all-cap fund performs.
    Originally posted by Linton
    We should show monthly returns and the standard deviation as a metric of volatility as the higher returning funds will probably show the greatest volatility over time too.
    Misanthrope in search of similar for mutual loathing
    • Malthusian
    • By Malthusian 2nd Oct 17, 3:44 PM
    • 3,460 Posts
    • 5,299 Thanks
    Malthusian
    But what I don't get is the logic that says that because there are many poor active funds it is better to go with passives, instead of an approach that says there are good actives but you need to do some homework to find them.
    Originally posted by ams25
    Why do you think all those thousands of rubbish active managers don't simply "do their homework", find one of those active funds which do really well, and copy their holdings?
    • bostonerimus
    • By bostonerimus 2nd Oct 17, 3:50 PM
    • 1,226 Posts
    • 684 Thanks
    bostonerimus
    Why do you think all those thousands of rubbish active managers don't simply "do their homework", find one of those active funds which do really well, and copy their holdings?
    Originally posted by Malthusian
    It would not be difficult to mirror the general holdings, but the details of all the buys and sells etc would be impossible to match, but each active manager must be convinced that they are doing that better than anyone else.
    Misanthrope in search of similar for mutual loathing
    • finellah
    • By finellah 2nd Oct 17, 3:51 PM
    • 14 Posts
    • 0 Thanks
    finellah
    Why do you think all those thousands of rubbish active managers don't simply "do their homework", find one of those active funds which do really well, and copy their holdings?
    Originally posted by Malthusian
    Honour????
    • bigadaj
    • By bigadaj 3rd Oct 17, 1:50 AM
    • 10,803 Posts
    • 7,100 Thanks
    bigadaj
    Honour????
    Originally posted by finellah
    In finance?
    • TBC15
    • By TBC15 30th Oct 17, 12:52 PM
    • 265 Posts
    • 87 Thanks
    TBC15
    Just a reminder that the October results for those participating or wish to participate will be due soon.

    http://forums.moneysavingexpert.com/showthread.php?p=73192349#post73192349

    I’ve rehashed the results opening post if anyone is missed out or thinks their classification is wrong please let me know.

    As Octobers go it doesn’t look like a bad one.
    Last edited by TBC15; 30-10-2017 at 12:58 PM. Reason: link
    • TBC15
    • By TBC15 1st Nov 17, 3:10 AM
    • 265 Posts
    • 87 Thanks
    TBC15
    The results for October are starting to come in.

    As the portfolios are supposed to reflect our actual holdings and investment patterns as far as the stock market is concerned adjustments in allocation are expected, just no new money.
    • jamei305
    • By jamei305 4th Nov 17, 11:13 AM
    • 238 Posts
    • 284 Thanks
    jamei305
    If adding my portfolio now in £100,000K terms should I value it as of 29 September?
    • TBC15
    • By TBC15 4th Nov 17, 1:21 PM
    • 265 Posts
    • 87 Thanks
    TBC15
    If adding my portfolio now in £100,000K terms should I value it as of 29 September?
    Originally posted by jamei305
    That would be fine,100K mix at the start of Oct and results at the end of Oct. Nice to have you on board.
    Last edited by TBC15; 04-11-2017 at 1:25 PM. Reason: extra text
    • TBC15
    • By TBC15 29th Nov 17, 4:55 PM
    • 265 Posts
    • 87 Thanks
    TBC15
    For those participating or wish to precipitate, end of days trading tomorrow is November update time.

    http://forums.moneysavingexpert.com/showthread.php?p=73192349#post73192349

    Looks like an uneventful month. But still going in the right direction.
    Last edited by TBC15; 29-11-2017 at 5:01 PM. Reason: Insertion of link.
    • TBC15
    • By TBC15 1st Dec 17, 3:05 AM
    • 265 Posts
    • 87 Thanks
    TBC15
    Well I should have kept my gob shut. Results for November posted, what a difference a couple of days make.

    http://forums.moneysavingexpert.com/showthread.php?p=73192349#post73192349
    • bostonerimus
    • By bostonerimus 1st Dec 17, 2:17 PM
    • 1,226 Posts
    • 684 Thanks
    bostonerimus
    Well I should have kept my gob shut. Results for November posted, what a difference a couple of days make.

    http://forums.moneysavingexpert.com/showthread.php?p=73192349#post73192349
    Originally posted by TBC15
    Nov 30th was ridiculous for the DOW....1.23% gain. This gave me another 1.5% monthly gain for my 50% US stocks, 20% International stocks and 30% US bonds. My bond return for October was revised up because of dividend payments so it was just to the positive side of 0%. Another boring month in index land.
    Misanthrope in search of similar for mutual loathing
    • Prism
    • By Prism 1st Dec 17, 2:22 PM
    • 53 Posts
    • 29 Thanks
    Prism
    Nov 30th was ridiculous for the DOW....1.23% gain.
    Originally posted by bostonerimus
    Whereas my active fund with no US banks got hammered. In fact the only two DOW stocks I have are Microsoft and Visa both which dropped with the rest of the NASDAQ. I think I was down nearly 1% on the day
    • TBC15
    • By TBC15 1st Dec 17, 4:39 PM
    • 265 Posts
    • 87 Thanks
    TBC15
    Bostonerimus, Linton. There is obviously problems with us brits getting our heads around $ based returns. If its OK with you Bostonerimus I’ll put in a passive fund Bostoner£ ( I’ll do the conversion if that’s OK with you) that reflects your returns for a UK investor in £. This would make it simpler for folks from the mother country to take on board and stop a lot of getting out the calculator.
    • k6chris
    • By k6chris 1st Dec 17, 4:50 PM
    • 151 Posts
    • 232 Thanks
    k6chris
    I think we should add a 100% Bitcoin portfolio, starting December 1st.......might make an intersting counterpoint / reference??
    EatingSoup
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