Best funds for long-term growth

Eponym

Credit-Crunched wrote: »

What are peoples thoughts on single currency, I pretty much think it is odds on to stay, which would indicate potential for longer term Europe recovery in equities which would place current prices as good buy opportunities?

That is my thinking - hence my post. But I am no economist!

darkvader

When one fire dies out another one is lit - and so it goes on....
It's a good idea to have exposure to all areas - you are buying Europe for cheap for the next 5 years before it then shoots up - so you dont lose.

As everything is cyclical, and no one can predict the next big turn of fortune, it's always good to dip your feet into all geographies - just dont overboard and put a lot, drip feed a little into Europe for now and once it settles down and picks up, review and drip feed more in

I am invested, via a monthly drip, across all geographies with about 50% in emerging markets of which 75% is in Asia. The remaining 50% is across every other continent thus giving me a balance I like

DV

bigfreddiel

i read a few entries and to be honest i coudn't see any evidence on the selection process - past performance is no guarantee of future performance as we all know and investing in the top dogs is a recipe for disaster - ever wondered why tables are for 1,3 5 and 7 years - its because no fund or share stays in the top ten for that long - if one or two do then the chances of you picking those winners consistently would like picking all 6 or even 5 numbers in the national lottery - it works for a very few people but not for the vast majority.

okay now we know its virtually impossible to pick winners consistently, then to buy low sell high ramps up the chances of success even more.

and the final problem that's going to reduce any meagre gains will be the charges involved with owning these top dog funds - these will be anything from 1 to 2% - now you need at least 4-5% to even beat inflation

picking what you perceive to be a good fund or stock will involve you in hours of misguided research, following up false tips until you've convinced yourself you found the pot of gold at the end of the rainbow - then there's the continual monitoring you'll be doing to decide when to get out of your no longer top fund into your new top fund.

its all a total waste of time

what you can do is to use low cost tracker funds or etf's to follow particular markets.

decide on your asset class distribution and just re-balance it each year to your original distribution - guarantees selling high and buying low.

what is the ideal asset distribution - a good rule is your age in bonds/gilts and 100-your age in equities

split bonds and gilts 50-50and equities 4 ways equally into ftse100, ftse250, s&p500 and emerging markets

and thats it

fj

Eponym

A tracker with HL would cost me £2pm so it would need to make greater gains than a managed fund to make the same money back. Since I'm only investing £50pm it makes a big difference.

I should also explain that in the next 5 years I intend to start investing in the Vanguard LifeStrategy 80%. I will build this up and over time that will be the bulk of my investment, with managed funds covering more specialist areas and areas to which I want greater exposure than the Vanguard provides.

pqrdef

Eponym wrote: »

Invesco Perpetual Income/High Income - but this is significantly invested in tobacco and I'm not keen on that for ethical reasons

The tobacco industry is a good example - a cash cow, but with a problematic future. Fine if you need the money to pay the bills. But if you're reinvesting, the trick would be to take the money and invest it in something else. With accumulation units, you're ploughing the returns back into tobacco, where you could end up with 200% of nothing.

Eponym wrote: »

JPM Natural Resources - has also dropped a lot lately so may be a good time to buy that too

Funds don't work like company shares. Because they've lost money doesn't mean they're cheap.

pqrdef

Eponym wrote: »

A tracker with HL would cost me £2pm so it would need to make greater gains than a managed fund to make the same money back. Since I'm only investing £50pm it makes a big difference.

The managed fund isn't free, there's a percentage quietly skimmed off, though not for much longer. Then you'll need to find a broker who charges a percentage, whether you're buying a managed fund or a Vanguard tracker. With flat-rate charges, £50pm will be out of the game.

We're fast approaching the end of the era of the low-cost tracker, which achieves most of its cost savings by paying chuff all to the distribution channel and being cross-subsidised by managed funds.

Thrupnybit

IM Hexam Global Emerging Markets - on the HL Wealth 150 list but checking Trustnet this fund is bottom of its sector over the last 1 and 3 years. My small holding in the fund is currently losing badly (26% down since purchase c13 months ago). Is it a hold or sell? Should I look on this as a five year plus investment? I'm struggling to see why HL still have it on their list but perhaps as a novice I'm missing essentials? (The Odey Opus fund is another one I have similar issues over though it does seem to be doing marginally better).

grey_gym_sock

i wouldn't take the Wealth 150 list too seriously. it only includes funds which pay commissions to HL, and who knows whether their selection is also influenced by the size of commissions?

picking good actively managed funds is, in any case, difficult or perhaps entirely a matter of luck. i wouldn't want to pay too much attention to 1-year or 3-year performance, because one fund may have a strategy that does well for a year or 3, but then circumstances change, and a different strategy may do well.

sorry for not actually answering your question!

Thrupnybit

Hmm, my best performing funds are also in the Wealth 150 list but I take your overall point, and I did do other research on those funds. I just think that being consistently bottom of the class for 3 years is maybe significant, coupled with going down at the moment. Variable, between quartile performance would be easier to accept, for me anyway.

Scallycat_2

My best ever (lucky) decision was 3 years ago, when I invested my full ISA allowance in the Invesco Perpetual Monthly Income Plus fund. I did it because I needed to take the income, but my capital is currently showing an increase of 30% and has never been less than about 28%.

Its certainly been propping up the rest of my portfolio.