Emerging market investing

masonic

bowlhead99 wrote: »

...for some reason when trying to pull data from Trustnet, it's not allowing me to add S&P500 as an index onto the graphs in the chart tool.

There is a workaround for this, which is to pull up a chart of any fund that uses the S&P 500 as a default comparison, e.g. iShares Core S&P 500 ETF. Examine the URL, and you'll see the codes for the two items on the chart...

trustnet.com/Tools/Charting.aspx?typeCode=E_FM2P3,NSP500

You'll see there is E_FM2P3, which is the ETF and NSP500, which is the index. You can take that NSP500 code and add it to any other chart where you want the S&P500 to appear.

Jsscmm

Assuming my maths is correct, 1000 invested in S&P500 (HSBC fund) ever other year from 1995 would give you 25.4k. The same invested into TEM would give you 40.4k. If you rebalanced to 50:50 every other year at the same as is putting the 1000 in, you should have 35.8k. All approximate figures, ignoring charges.

Which surprised me. Which means I may have a mistake somewhere in the maths.

On a related question... the reason for approximate figures is that whilst I can get a graph out of Trustnet, I can't see an obvious way to get raw data out of it. Am I missing it?

bowlhead99

Jsscmm wrote: »

Assuming my maths is correct, 1000 invested in S&P500 (HSBC fund) ever other year from 1995 would give you 25.4k. The same invested into TEM would give you 40.4k. If you rebalanced to 50:50 every other year at the same as is putting the 1000 in, you should have 35.8k. All approximate figures, ignoring charges.

Which surprised me. Which means I may have a mistake somewhere in the maths.

On a related question... the reason for approximate figures is that whilst I can get a graph out of Trustnet, I can't see an obvious way to get raw data out of it. Am I missing it?

Rebalancing internally in your portfolio is very powerful if the two things you invest in are moving in opposite directions for a while. You are effectively always 'buying low' and 'selling high'. So you can get a return with lower volatility (because of holding more than one product) but with performance towards the top end of the scale.

Inspired by Masonic's post saying to ignore short timescales and also to diversify I have run some numbers showing how that would work with rebalancing - will post on a new thread.

It's easier to prove that on paper without the distraction of new money coming in each year - because in your 'adding 1000 every so often', some of the money is being invested for a relatively long time and some for a relatively shorter time and therefore harder to get a fair 'annualised' performance.

You are right they don't publish tables of historic prices so graphing a date range is better if you want to get a performance snapshot (with fewer funds at once so that the scale is more useful for the one you really want to check)

Jsscmm

I'm sorry, I wasn't clear. I thought that rebalancing TEM vs S&P500 would have generated a higher return than either of them alone based on a quick look at the graph. Hence my surprise when TEM had a higher return.

I'd included a gentle drip feed, to include pound cost averaging and represent a more likely scenario. However, removing the additional cash... 1000 in S&P 500 for that time period suggests 5250 as a final return, TEM 6750. However, rebalancing every 2 years would give 7550!

The 'right' answer in terms of overall returns does vary... if you had gone for 2 - 8 years less, then TEM would be better than rebalancing, but the overall principle, outlined nicely by bowlhead99 above, is sound.