Which fund would you choose?

BrockStoker

Linton wrote: »

Are you talking about income now? If so, I dont believe you can do all these things with one portfolio. I would have a portfolio to focus on sustainable income and a second portfolio for long term growth. If need be rebalance betwen the two on say an annual basis.

You seem unclear on timescales. You cant satisfactorily aim to maximise return over 5-10 years and also do it for 20-25 years. The two timescales demand different investments. Suggest you focus on the more important timescale and then review in 5-10 years.

Once you have focussed your objectives you should find the question of choice of assets and therefore funds much easier.

Thanks for your reply.

Yes, my RL360 portfolio currently pays us £1K per month.

Point taken re the timescales. I am unsure, so as you suggest I'll focus on the mid-term and then review.

BrockStoker

jamesd wrote: »

For what it's worth I've held the Threadneedle fund for many years. You should add Jupiter European to your comparisons.

You may also find it useful to look at the investment trusts European Assets trust (smaller companies), Fidelity European Values (large-cap) and Jupiter European Opportunities.

Thanks for the suggestions. I would like to diversify a bit more by sector so will look into them.

BrockStoker

masonic wrote: »

Because of the retail distribution review, the platform must rebate any trail commission back to you (in the form of additional units), so in effect you'll be getting the lower charges one way or another... unless RL360 is operating completely offshore and does not need to comply with UK regulation, but if that's the case then you may not have any FSCS protection either if they, or one of their partner companies, goes insolvent.

That is good to know, and I will ask RL360 about it. Thanks for pointing it out!

BrockStoker

bowlhead99 wrote: »

No, not really. What they are doing is painting a less rosy picture of historic performance, because the reported performance was after the gross returns had been netted down by high fees. Those high fees no longer exist so going forward, you will be better able to access high growth while unconstrained by fees.

For a given set of economic circumstances, the investor would get (say) 8% return now instead of 7.5% shown on the chart, because he would save half a percent or more by getting a clean fund with a small platform fee.

I think you're suggesting that the returns 'boosted' by a one off fee change - i.e. the fund was value 100, and it grew 9.5%, and then it somehow got a one off 0.5% from saving fees, so the chart says it delivered 10%. That is not how it works; the NAV was not boosted as no historic fees were returned to the fund, they simply didn't take out so much fees going forward. So if they say they delivered 10% then they really must have delivered 10%, and you will get at least 10% going forward (if the markets could be duplicated) because the fees are just as good or better than they used to be.


Funds will generally be comparable. Generalising, some types of funds, like trackers, never really had mega high fees as they didn't give so much kickback to platforms or IFAs for advertising them, so there was less to be saved by the industry fee reduction. So, an old active fund probably did relatively better than the tracker than the graphs imply, because the active fund achieved its net result after it had been hammered with fees, which no longer exist, while the tracker fees might have already been blessed with low fees with no significant platform kickbacks.

So the effect is more between trackers and actives rather than between two trackers or two actives. But this is only a very broad generalisation as tracker fees have certainly come down - you could never find them at 0.1% p.a. five or ten years ago. The downward pressure on fees in the industry generally, with the improved transparency, has led trackers to just start charging less.

So comparability across funds is not a major issue, just something to be aware of. Is the fee the same fee you would pay now - if not, then your real performance will be a bit better than the graph suggests.

The problem with the fee changes is that many funds launched new classes so if you go and look at Sample Fund 1, you might see a chart that started in 2013, but actually that is just their new Class Z and you need to go and look at Class A to get the whole history back to the 1990s.


If your income and gains are made inside an ISA there are no tax implications at all. All income and gains are invisible to the tax man. Only if you take money out of the ISA wrapper (or have not put it in yet) and then invest it outside an ISA, will the income and gains be on the radar, from that non-ISA investment activity.

It is similar to the Micro Cap because about a third of its holdings are Micro Cap sized companies. In the Micro Cap, about 80% are that size. It will have a different industry sector mix; the Special Situations fund is a third industrials and only 11% technology, while the Micro Cap is over 24% technology and less than that in industrials
http://www.marlboroughfunds.com/uploads/!!!!!!-mssi.pdf

Trustnet lets you pick from a drop down to see all the share classes and its clear that the full 'retail' class is more expensive than the others. If your platform doesn't carry the cheap versions of all the funds you want, consider changing it. No point paying an extra three quarters of a percent for a fund when you could simply go elsewhere and pay a 0.2% platform fee to access the cheap one. Or if you have a lot of money on platform, paying a flat fee rather than percentage based could be even better. These differences can make a lot of difference to returns on the exact same assets over a decent time period.

If you are checking out clean vs dirty priced funds it is worth seeing whether your platform has a mechanism to refund you some of the commission on the dirty priced funds. Most do, so the costs may not be as high as they appear.

I would agree with jamesd that it's worthwhile including investment trusts when looking at how to invest in a market. Both JEO (which he mentions) and HEFT have served me well for Europe in the past. If you are investing large chunks of money, they can be very efficient to hold on most platforms as the transaction fees are pretty inconsequential and many platforms don't charge an annual percentage on shares and investment trusts.

Thank you for taking the time to explain and for the suggestions. Lots of food for thought, so I will retire, digest for a bit, and if I get stuck I'll come back and post another question or two.

Thanks again to yourself and everyone who has posed a reply!