Hisk risk penion funds

wotsthat

SallyG wrote: »

How do IFAs decide what funds to recommend to clients?

Do you remember Paul the octopus from the world cup....

Loughton_Monkey

wotsthat wrote: »

Do you remember Paul the octopus from the world cup....

Remember him? Actually ate some of him!

http://www.jamieoliver.com/foodwise/article-view.php?id=1388

First of all, you need the right kind of seaweed - the one that tells you if Stock Markets are going to go up or down. Only then can you use the 'Funds Octopus' because although he'll tell you the most 'dynamic' funds, that will go up far better than others, if the market goes down, then these are the same ones that will go down the most.

Get_Rich_Slow

If you are to save regularly then selecting some high risk funds is a good strategy. Funds (actually they are all investment trusts which tend to perform better than unit trusts and have lower charges) to consider could include:

Templeton Emerging Markets Investment Trust (TEM)
JP Morgan Emerging Markets Investment Trust (JMG)
RCM Technology Investment Trust (RCM)

None of these funds will track the UK stock market and will be volatile i.e. if the fear of them dropping a lot in crash like in 2008 worries you then they might not be for you.

To counter balance these funds you could save into safer funds such as:
RIT Capital Partners (RCP)
Calendonia (CLDN)
Ruffer Investment Company (RICA)

Suitable Pension schemes to hold such shares in would be ones where they have a low annual cost or no charge for holding such shares.

The letters in brackets are the UK stock market name for the share, so if you go to Google Finance and enter RCP you can see the track record of the trust and compare it to the FTSE 100 for example. Over 1, 5 and 10 years it has performed much better than the FTSE 100. No guarantee of future performance but remember the Rothschild's invest £400 million of their own money in the trust and manage it themselves - so if the fund manager screws up they lose their own money.

middlepuss

Get_Rich_Slow wrote: »

If you are to save regularly then selecting some high risk funds is a good strategy. Funds (actually they are all investment trusts which tend to perform better than unit trusts and have lower charges) to consider could include:

Templeton Emerging Markets Investment Trust (TEM)

Is the Templeton Emerging Markets Investment Trust a high risk fund? Or, for a long term investor, is it no riskier than, say, a FTSE tracker - just more volatile?

Linton

middlepuss wrote: »

Is the Templeton Emerging Markets Investment Trust a high risk fund? Or, for a long term investor, is it no riskier than, say, a FTSE tracker - just more volatile?

Good question. When I use the term risk I usually mean short/medium term volatility. From that POV emerging market funds are clearly high risk - they more than halved in value in 2007/2008. I guess you can add into that one's own personal view of the long term future of the sector. Then I would say that the emerging market short term risk is greatly mitigated by the likely future.

The FTSE100 is a bit less volatile and IMHO has less of a glorious future. I would say therefore that it has much the same high risk as a good Emerging fund. This is why I am concerned at the tendency for newbies to investing to go for FTSE100 trackers because they are told that low charges are a good thing.

Whether these musings tie in with what an IFA conducting a formal assessment may mean by risk I dont know. It would be interesting to know.

lvader

The FTSE gets a bad wrap, most poeple think the UK economy isn't so good so the FTSE must be the same. Actually the FTSE is dominated by large multinationals, some of which aren't even based in the UK and have very little to do with the UK economy.

Linton

lvader wrote: »

The FTSE gets a bad wrap, most poeple think the UK economy isn't so good so the FTSE must be the same. Actually the FTSE is dominated by large multinationals, some of which aren't even based in the UK and have very little to do with the UK economy.

The problem with it that I see is that it is too strongly swayed by bubbles and the performance of a few individually high risk companies. We saw that with the tech bubble when miniscule companies were elevated to high status and BT became one of the largest companies in the world. More recently we have seen the banks, foreign miners and oil companies dominate the index. What the index is really measuring is unclear to me.

Any investment which hasnt yet recovered from a bubble of 10 years ago (in simple cash terms, never mind inflation adjusted) must surely be seen as risky and potentially flawed.

lvader

I quite like the current make up of the FTSE, a lot of the companies are well positioned to make the most from emerging markets. Regardless of how the UK economy performs that FTSE is well positioned to do as well as any of the major indicies.

feesarefare

[QUOTE=SallyG;

39346070How do IFAs decide what funds to recommend to clients?

Past performance
Ratings
By the number of pop up advserts they have on Citywire etc
Ones that easy to sell - fashion funds
The next big thing funds
Funds provided by fund managers that host "round table" diners at plush hotels
Funds provided by fund managers that host golf days at exclusive clubs.
The one thay have applications for

What other sites do IFAs consult on a daily basis

This one?

Woby_Tide

lvader wrote: »

The FTSE gets a bad wrap, most poeple think the UK economy isn't so good so the FTSE must be the same. Actually the FTSE is dominated by large multinationals, some of which aren't even based in the UK and have very little to do with the UK economy.

If they are in the FTSE and/or a large multi-national how do they have very little to do with the UK economy when the FTSE links into so many indices that funds/accounts all track, along with money moving in and out of the country through these multi-nationals an dthe UK people they employ?