m&g recovery fund

mitchell

Hi all,

Looking to invest in a fund after research on here im opting for the m&g recovery fund with hargreaves lansdown.

ive used up both isa allowances, i have instant access savings account with £1000 invested so far.

basically wanted to know if anyone has any past experience with m&g recovery fund and whether you think this is a good choice, the reason ive opted for recovery is ai think the market is far from recovered and could take at least 5years and hopefully the fund will grab bargains along the way.

thanks

mitch

Linton

I have owned this fund for 15 years. During that time it has averaged over 7% return per year - an excellent performance. In the same period the FTSE all share averaged under 4% annual return (if my calculations are correct).

BUT it may be volatile - rather more so than the FTSE All Share, so you need to be thinking long term. Also as finances permit I think you should be diversifying into other areas.

mitchell

what areas are you diversifying into? i may hold this fund as a starter and then as you said finances permiting venture into other areas, there is so much choice which i find the problem.

Linton

mitchell wrote: »

what areas are you diversifying into? i may hold this fund as a starter and then as you said finances permiting venture into other areas, there is so much choice which i find the problem.

We are talking here about the important area of asset allocation between investments..

The first step is to determine an objective/timescale for your portfolio. For example, is it to buy a house in 5 years or retire in 20 or leave it to the kids/grandkids in 50? (adjust numbers depending on your age!). The longer the timeframe the riskier the areas you could sensibly consider.

The next question is what other wealth do you have? If this money is essential to your future you need to be cautious, if its icing on the cake you can be less so.

Finally, could you sleep calmly at night having suffered a 30% downturn happy in the knowledge that things will recover, or would you collapse in a panic? This will also affect your choice of investment.

In my personal case, my funds portfolio is really icing on the cake, or long term (20 year?) emergency fallback. I have plenty of other savings/pensions, and have been through 2 boom/collapse/recovery cycles and so not I am not unduly worried if funds perform badly for a while.

With that background I have other recovery funds (Fidelity Special Situations), a range of far east and emerging market funds, technology funds, natural resources etc. In all a high risk portfolio, but hopefully sufficiently diversified to work safely in the long term.

Available fund areas range from relatively safe gilts and bonds through to index trackers, equity income, UK and Global general funds etc, via the sort of funds I like, onto the really high risk areas only appropriate for the expert.

Once you have worked out your strategy, you can then determine which specific funds, or other investments, you need to buy. But IMHO this is less important than getting the strategy and high level allocation right.

You can find detailed info on funds in any desired area in https://www.trustnet.com.

hebron

I know there is always a risk to investments but can you tell me where the recovery fund come on the risk scale?

Thanks.

dunstonh

I know there is always a risk to investments but can you tell me where the recovery fund come on the risk scale?

medium/high risk in my opinion. 7/10 on a 1-10 scale (cash being 1 - 10 being the highest risk unit trusts you can buy). Of course, risk analysis is always an individual opinion.

What risk level do you think it is?

Jake'sGran

You might find this on Trustnet. It does give the performance of funds over a number of years and I think you will also find the risk level on that site too. I used to hold an investment in that unit trust a few years ago and didn't think it was doing very well so I sold it but, at that time, I did not do much research.

I thought all "recovery" funds were said to be risky. Having said that, I am thinking of putting more money in Fidelity Special Sits which has been brilliant.

FATHEROFTWO_2

I have the threadneedle mid cap 250 fund instead of the recovery.
I did acomparison and thought the threadneedle at that time looked better.

Its important to have a wide range of diversified funds

have a look at bestinvest "asset allocation" and it gives you an approx breakdown for a start