cautious funds

fender2000

looking to put £60000 away to create an income as I am semi retiring some one advised the prufund cautious any advice please

Drp8713

I would go for the Personal Assets Trust, or maybe Standard Life GARS.

Totton

Personal Assets Trust (PNL) has delivered pretty poor returns but that's what you get if going for very cautious, I hold PNL but much prefer RIT Capital Partners (RCP) or Ruffer Investment Trust (RICA) at the moment for new purchases.

I sometimes read that Personal Assets is for the very wealthy but personally I do find it reassuring to have a holding in it, al alternative in the funds universe would be Troy Trojan which is run by the same guy - Sebastian Lyon.

If buying PNL be prepared for some downs when the markets are going up :-)

xylophone

How old are you and your wife?

How much money will your part time work bring in?

What is the shortfall between your current income and what you will receive after going part time?

xylophone

Do each of you have an occupational/personal pension?

BLB53

I would recommend the Vanguard Lifestrategy40 fund - low cost, globally diversified.

The problem with the managed funds is higher costs and the manager who will move the portfolio in and out of various equities/bonds so the investor will never be quite sure what level of risk they are exposed to.

fender2000

we are both 60 I get £40 per week from private pension.£150 per week part time work and £80 per week tax credits,just wanted a safe option for our money to retain the capital and to make a small income from it,as we were recommended the prufund cautious as we could take 5% tax free from the fund per year and more or less keeping the capital intact hopefully,thanks

bowlhead99

BLB53 wrote: »

I would recommend the Vanguard Lifestrategy40 fund - low cost, globally diversified.

The problem with the managed funds is higher costs and the manager who will move the portfolio in and out of various equities/bonds so the investor will never be quite sure what level of risk they are exposed to.

Well VLS40 is certainly an example of a portfolio that's been put together with no regard for the objective of income generation.

The notion that if you use managed investment trusts with a focus on capital preservation (PNL, RICA etc), or actively managed multi-asset income funds which include equity income shares, bonds, property etc, or strategic bond funds, that "the investor won't be quite sure what level of risk they are exposed to" is probably a red herring and almost certainly depends on how you define risk.

I don't believe that the typical early retiree who generically wants to stick his £60k in "something to generate an income"and is asking for thoughts from his pals or anonymous strangers on the internet, is properly qualified to assess exactly what risk he is exposed to in VLS40 with 40% allocated across global companies skewed by relative size and then 60% on bond indexes as allocated by Vanguard and then changed from time to time.

I would expect the manager of a strategic bond fund or an investment trust to be constantly assessing the risk/reward that they feel is available across different asset classes with an objective of optimizing returns in line with the stated strategy. If the stated strategy is just "hold this index of bonds and see what happens", the growth or the yield (latter being particularly relevant where regular income is needed) may be suboptimal for the objective.

In bond markets, default risks, economic risks, systemic risks, interest rate risks, exchange rate risks blah blah blah change all the time. Most of us don't have a clue how to effectively measure them or do anything about them.

This gives us two major choices, a) through a management fee, employ someone who thinks they do have a plan on how they would react to certain market conditions, or b) buy a bond index and hold all the bonds that are out there in the proportions that they are demanded by investors with completely different objectives to yourself (pension funds, insurance companies, world governments etc).

If you think the second one is better because you will somehow always be "quite sure what risks you are exposed to" then I guess VLS40 might be the best thing for you as an income seeker. I remain unconvinced.

xylophone

It seems to me that with the desire to generate a small amount of income and keep your capital intact, you could do worse than 2 sole and one joint 123 account?

You could spread your direct debits which are eligible for cash back between the three so as to avoid the charge - you would need to cycle in and out the required £500 a month but by using another account this should be easy.

You and your wife might like to check your new state pension position.

https://www.gov.uk/state-pension-statement

fender2000

thanks all