Defensive funds

pqrdef

Quiz question.

Suppose hypothetically that you have to put £5K in a single fund. Your main concern is to preserve capital in the event that everything tanks in the way it easily could - Credit Crunch 2, European banking crisis etc, effects spreading worldwide.

Spreads, charges and TERs are of secondary importance.

Cash and short-dated bonds are out - the fund should qualify for a S&S ISA.

Complete investor profile is irrelevant, as the only issue is the £5K - assume that a loss on this can't be set against gains elsewhere in a portfolio.

What would you pick? What's least likely to be more than 10% down in 12 months' time?

Ark_Welder

Trojan Fund, from Troy Asset Management. Capital preservation is its remit. Still has about 27% UK and US government index-linked bonds, 12% gold. Don't expect it to shoot the lights out, it's on a slow burn.

Not a fund for those that benchmark against the FTSE All-share index: it will usually underperform when the index is rising, but do better when the situation is more volatile and/or markets are falling. Total return compared against the All-share over 3 years shows underperformance, but the 5, 2 and 1 year compares demonstrate exactly what the fund is all about. But no guarantees of future success!

http://www.trustnet.co.uk/Factsheets/Factsheet.aspx?fundCode=LAF05&univ=U

http://www.taml.co.uk/


[Edit]
I would probably go this route rather than Personal Assets just now because Trojan has a higher weighting in cash and bonds, which should mean less volatility going forward. I do hold both, though (different platforms, different charges...). At least, it did have the last time I checked up on PNL, so that's a job for me to do a little later on!!

pqrdef

Ark_Welder wrote: »

Trojan Fund, from Troy Asset Management. Capital preservation is its remit. Still has about 27% UK and US government index-linked bonds, 12% gold.

Thanks. Must admit the linkers and the gold scare me off a bit, having sold what I had of those.

Ark_Welder

pqrdef wrote: »

Thanks. Must admit the linkers and the gold scare me off a bit, having sold what I had of those.

Most of my gold holdings are now held indirectly through the likes of Trojan, and all linkers and conventionals are. PNL holds less IL gilts and more in the way of US TIPS, bit less cash too, I think.

http://www.patplc.co.uk/


Alternatives could be the Ruffer products, Total Return for the OEIC and Ruffer Investment Co as the IT (N.B. Incorporated in Guernsey for the tax conscious). The Troy-managed funds show a bit more alpha and less volatility, though, over recent times.

pqrdef

Ark_Welder wrote: »

Alternatives could be the Ruffer products, Total Return for the OEIC and Ruffer Investment Co as the IT (N.B. Incorporated in Guernsey for the tax conscious).

Thanks, am investigating.

Nobody else have any thoughts? Does this mean that nobody else is taking all the doom and gloom seriously?

Totton

Didn't want to repeat Ark Welder but here goes, I hold and would select Troy Trojan and PNL, I think they are both a good bet to limit downside at the moment. Performance wise there is very little between these until you go further than 3 yrs when PNL does better but Troy better over 5yrs. You can't really compare though as Troy have not been managing PNL for those longer periods.

I guess I have held Troy Trojan for at least 6yrs, perhaps longer. I can only recall one difficult period that caused me to wonder if I should sell but other than that it has been a 'sleep at night' holding.

HTH,
Mickey
ps. If you hold or buy some PNL, ask them for a copy of '60 Not Out'. This is a collection of quarterly reports that read like a history students summary of the financial crisis, except they were written at the time before everything unfolded!

moneylover

Isnt Troy Trojan on a soft close or whatever you call it - don't you get 5% less than you pay for or something like this?
If you buy through HL is it this fund please (if you want accumulation units that is)
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/t/troy-trojan-class-i-accumulation

Ark_Welder

moneylover wrote: »

Isnt Troy Trojan on a soft close or whatever you call it - don't you get 5% less than you pay for or something like this?
If you buy through HL is it this fund please (if you want accumulation units that is)
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/t/troy-trojan-class-i-accumulation

It is soft-closed, but the 'I' shares are still available through HL with the initial charge discounted and HL's usual minimum contribution level.

The 'O' shares are available from ATS, though, which carries a 0.5% lower AMC. No doubt there are others

Jegersmart

I would (and have to a considerable degree) gone for CF Miton Special Situations as part of my portfolio. They have a very "flexible" remit. Alternatively you could also look at some of the Liontrust options. Stan Life GARS and Newton Real Return should also give you a fairly defensive position. With the falsl of the FTSE down to 5150-5175 today you could go riskier with marlborough Special Situations or even a fairly non-fancy Fidelity Moneybuilder Balanced fund perhaps?

It is difficult to know where to put your allocations these days, having de-risked in August I am now at the start of rotating back to more risky options during the current downtrend. Good luck and let us know how you get on!

J

moneylover

Ark_Welder wrote: »

It is soft-closed, but the 'I' shares are still available through HL with the initial charge discounted and HL's usual minimum contribution level.

The 'O' shares are available from ATS, though, which carries a 0.5% lower AMC. No doubt there are others

ATS?
Also, what is the difference between I and O? Would one be better than the other please - obviusly .5% on the AMC is worth saving

dunstonh

It is soft-closed, but the 'I' shares are still available through HL with the initial charge discounted and HL's usual minimum contribution level.

The 'O' shares are available from ATS, though, which carries a 0.5% lower AMC. No doubt there are others

Both the I and O are available via platforms (without the £250k min and 5% charge). it is only direct investments that are soft closed.

Also, what is the difference between I and O?

The I version is commission paying. The O version pays no commission (the I version is more expensive and all of that increase goes to the platform/distributor)

You tend to find the I version on bundled platforms and the O version on unbundled platforms.