Choosing funds to invest in...

jon3001

deadpeasant wrote: »

HSBC launched their trackers on 01/11/2000. According to Trustnet's charting tool, here are some cumulative performances since then:

HSBC FTSE All Share Index Ret Acc 20.38% (1.71% annualised)
HSBC American Index Ret Acc -18.22% (-1.82% annualised)
HSBC European Index Ret Acc 7.24% (0.64% annualised)
HSBC Japan Index Ret Acc -26.51% (-2.77% annualised)
HSBC Pacific Index Ret Acc 128.03% (7.81% annualised)



Over 11 years, this performance is utterly dismal. Only the Pacific tracker did OK by being heavily exposed to emerging Asia. Prospects continue to be bleak.

Investing is for the long term. But how many more years will it be before developed markets offer better long-term growth than savings accounts? Is there not some real possibility that in 14 years' time holders of a basket of trackers will look back on a quarter century of zero growth?

I don't think this reflects the returns that a typical investor would experience because it makes the following assumptions:

1. Investor put their money in just before the tech bubble popped (01/11/2000)
2. They invested all their capital in one go (rather than make regular monthly contributions).
3. They never rebalanced their portfolio (taking advantage of uncorrelated markets such as Japan).
4. They didn't further refine their portfolio (e.g. using bonds as a hedge or diversifier)

But yes - you should also invest outside of developed markets and indeed stocks.

deadpeasant

jon3001 wrote: »

I don't think this reflects the returns that a typical investor would experience because it makes the following assumptions:

1. Investor put their money in just before the tech bubble popped (01/11/2000)
2. They invested all their capital in one go (rather than make regular monthly contributions).
3. They never rebalanced their portfolio (taking advantage of uncorrelated markets such as Japan).
4. They didn't further refine their portfolio (e.g. using bonds as a hedge or diversifier)

But yes - you should also invest outside of developed markets and indeed stocks.

Yes, all good points for the OP. I'm glad I followed Tim Hale's advice and started heavily in gilt funds, as I've recently used my profits from those to buy into reduced-price equity funds.