low-cost HSBC gilt index fund

kidmugsy

Sceptic001 wrote: »

If we ever get to a stage where the UK government is having to decide whether to default on gilts or ILSCs, we will all be more interested in our stock of tinned food than in our investment portfolios. :eek:

My portfolio includes tinzabeanz, sardines, corned beef, tomatoes, pears; stocks of binliners, kitchen foil, bog rolls, water purification tablets, and the like. Doesn't yours?

Masomnia

I guess it does just depend on what you need the money for.

In terms of my long term investments, I have zero bonds. Being 22 and thinking gilts are expensive I don't see the point.

I'm going to look again in a few years, scalp some equity profits and put some in gilts in maybe 5 years time, depending on the market conditions of course.

dunstonh

I just had my quarter sector allocations in and they have wiped out gilts. Strategic and high yield bonds are the only fixed interest sector investments still making up that sector breakdown.

That is of course just an opinion of an actuarial company.

dunstonh

12tonelizzie wrote: »

Can I ask what that means exactly? Thanks

Many IFAs and investment companies buy or are supplied research and information to allow them to build and maintain investment portfolios. This data tends to change monthly/quarterly to reflect the pricing of the assets (undervalued/overvalued etc) and where the long term view of the economic cycle is. For example, back in 2007, the sector allocation for property was put at zero but was increased back up in 2009. The allocations add up to 100% but it tells us how much there should be in UK equity for example or US Equity etc. The most recent allocations supplied put gilts at zero.

Jegersmart

I think some people make it very complicated to "invest". Generally speaking using funds - whether ISA or non-ISA or SIPP - is the easiest way to gain exposure to whatever instruments, baskets, geographies etc that you personally think you want. It is good not to get too fixated on one thing - spending all your time justifying to your self that a "Gilt" is the right instrument for you in your situation is probably taking it too far imho. In my view you should view your holdings as a FM does - i.e. that you have as much or little diversification that you want, and that you can choose to actively manage your fund holdings as you see fit. To the 22 year old who said that he will probably "survive a few equity crashes" I would say that whilst this is true, it doesn't mean that it is anywhere the best way to look at it. After all, if you had a FTSE Index Tracker fund from 1998 until today you wouldn't have made anything at all and that is before fees.

I tend to look at the global markets regularly (and spend a few hours on a weekend every so often looking at equity charts) and act accordingly. I do not mind making chages every so often if I see fit (and it does help that I have been working in the financial and energy markets for almost 15 years) - I recently reduced my exposure to commodities and it has turned out well - there is no point taking a 5-10% drop if you don't have to.

In the end though, depending on your access to market information and your own knowledge I would keep it as simple as possible proportional to your knoweldge and experience. After all, an FM with 20 years experience will probably know when to go Gilt and when to go Corporate - as long as the Fund mandate allows it of course and that is where I would spend my time researching - to ensure the correct level of exposure and focus for *you*.

Just some thoughts - good luck!

p.s. currently I am about 72% equities, 24% bonds and the rest in MM and cash - although I am fundamentally bearish on equities in the larger sense I feel a bit bullish - the markets soak up bad news and do not drop - so looking for a reasonable July and may rotate after the summer. Watching commods and crude as well, recent pull-backs are good news imho - but we will see.

Jegersmart

dunstonh wrote: »

Many IFAs and investment companies buy or are supplied research and information to allow them to build and maintain investment portfolios. This data tends to change monthly/quarterly to reflect the pricing of the assets (undervalued/overvalued etc) and where the long term view of the economic cycle is. For example, back in 2007, the sector allocation for property was put at zero but was increased back up in 2009. The allocations add up to 100% but it tells us how much there should be in UK equity for example or US Equity etc. The most recent allocations supplied put gilts at zero.

I would use all the information at your disposal and not put too much weight in any particular one. Whether you are an IFA or not, following generalised sector allocations is as bad as following broker recs imho - everyone should be aware of what they want to invest in and why - yes we all make wrong decisions every so often but it is better than following someone else and not even understanding why you lost money.

All IMHO and DYOR of course.

Jegersmart

12tonelizzie wrote: »

Absolutely. I'd love to hear how it can be done more simply.



Ah. I thought it was going to be simple.



I'm not sure I even know what equity charts are...



Uh, yes, it does a bit, doesn't it?

People like the OP and me (title for a new sitcom?) are just here for some help getting started as we're scared of losing our savings to inflation, we're not IFAs and we haven't worked in finance for over a decade. We value the likes of Tim Hale's book because it makes things clearer and simpler in an implementable way.

It could be that I have not stated my point as clearly as I would have liked, I didn't mean to patronise anyone or confuse the issue.

I guess what I am trying to say is that keeping it simple by choosing geographical area, type of instrument(s) and level of exposure only could be worthwhile rather than researching a particular type of FI instrument. If looking at equity charts for general trends is too difficult (I don't mean that in a facetious way btw) then how does one justify researching in depth a particular debt instrument and how that would behave in a variety of economic scenarios that may occur?

I therefore suggest that in addition to all the research you have done that you use a little time looking at managed funds that may have the correct profile or mandate for what you want to achieve - that regularly outperform their index and so on - you pay extra for the FM but he will normally have a lot of experience that you don't have. If you want a diversified multi-asset fund you could look at Newton Real Return for example or if Sterling Bonds are what you want M&G Optimal Income (this one includes some level of Gilts iirc) - but it is of course up to you. You can check Trustnet for the research.

I hope this clarifies what I was trying to say.

Good luck with whatever you choose.