What Multi Asset Funds

Random47

Going for 2 SIPPs & 2 ISAs with Fidelity (Cheap, but not cheapest but like web site its easy to navigate and spoke with them on phone and seem to be contactable without issue and friendly without being pushy)


Will use Multi Asset to give me some diversification of risk spread (geography, property, shares/bonds, etc.)


Looked at L&G Multi-Index, Blackrock Consensus, Vanguard Life strategy, Fidelity Pathfinder
(Though don't like the 1.5% charge on buying Vanguard each time I drip feed monthly money in)


Are there other I should consider?
Preferring the funds costing under 1% (.5 or .6 even better) as looking at steady growth over the next 20yrs.


Also I fancy a punt with Fundsmith Equity T Class (just over 1% in fee) but wondered what others thought.


Appreciate all comments will be as bar talk only.

AlanP_2

Are you sure Fidelity charge 1.5% for monthly drip feeds into Vanguard?

I'm with Fidelity via Cavendish for a SIPP that is all Vanguard funds and only get charged the 0.25% or 0.3% platform fee (can't remember offhand) plus the 0.24% OCF built into the fund pricing.

One thing to consider is the aims for each investment and the time
scale as well.

For example if your ISA is for funding a child at University or something in 10 years time and your SIPP is for when you retire in 20/30 years time the AIM is very different and could affect your fund choices.

Random47

Vanguard described here on Monevator was what I was reading:

You’ll also pay an upfront cost called a dilution levy. For once, this is a good cost as it’s designed to penalise market-timers switching in and out of funds like manic high-frequency traders. The dilution levy is meant to cover the transaction fees incurred by trading, and is paid back into the fund for the benefit of the buy-and-holders.
The biggest hurdle for retail investors using Vanguard funds has always been dealing fees that play havoc with small, drip-fed contributions. But the LifeStrategy route elegantly side-steps the problem by enabling you to invest in an entire Vanguard portfolio for just one dealing fee.
If you buy using Alliance Trust’s regular investing scheme, you’ll only pay a dealing fee of £1.50. That amounts to an acceptable 0.5% off a £300 monthly contribution.


I am reading this as a charge applied to every months contribution, not a huge fee, but a fee nonetheless.

JohnRo

I am reading this as a charge applied to every months contribution, not a huge fee, but a fee nonetheless.

It sounds like you're possibly conflating two entirely independent things, the PDL is levied on purchases of some Vanguard funds by Vanguard themselves and cannot be avoided. It's a flat rate so it doesn't matter whether you make one huge purchase or hundreds, the net cost is the same, discounting inflation.

The Alliance trust part of the quoted text is the broker/platform fee and can be mitigated by selecting the most appropriate platform and fee structure for the type of investment you'll be doing. Several annual percentage rate brokers charge nothing for purchasing and selling funds but will take a relevant periodic fee from the account balance based on their annual rate.

Random47

cheers - help clear than one up. Though VLS do seem to have a bit of fanatical following.

Freecall

Random47 wrote: »

VLS do seem to have a bit of fanatical following.

Well Vanguard now has more than $3 trillion USD in assets under management so I guess that they do have a bit of a 'fanatical following'.

But then again Blackrock still beat them with nearly $5 trillion USD, if that is a measure of the 'fanatical following' metric.

Personally, I can still remember when a trillion was considered a lot of money so they all seem big to me.

Random47

Did realise BR outstripped VG on funds invested.


Well liquefied savings pot today so ready to pull the trigger on funds to be invested in. Will discuss further what specific funds with wife over next couple days before finalising choice.


Did have the gulp of air intake, well here we go invest today, crash comes tomorrow Suppose most first timers have that feeling.

gadgetmind

Random47 wrote: »

Did realise BR outstripped VG on funds invested.

We've got a lot with VG because we use their ETFs in my SIPP and our ISAs, but we've got close on the same in BR as my GPP uses their trackers.

I certainly wouldn't say I'm fanatical; it's just cheap beta all said and done. OK, so VLS is fairly neat, but it's just a multi-asset tracker, and there are plenty of those in the form of pension funds that use passive components.

Mistermeaner

If you're not sure buy a bit of all of them. I have both vls and l+g

Random47

Looking at various funds and one of the graphs given is the Net Asset Value. How does this relate to the return on your investment.
Is this your growth / return?
The reason I ask is because looking at VG UK bonds and long term gilts funds the NAV is 20% some years, but I thought gilts / bonds paid very low rates (guaranteed) each year?
Showing my novice understanding now.

bigadaj

Random47 wrote: »

Looking at various funds and one of the graphs given is the Net Asset Value. How does this relate to the return on your investment.
Is this your growth / return?
The reason I ask is because looking at VG UK bonds and long term gilts funds the NAV is 20% some years, but I thought gilts / bonds paid very low rates (guaranteed) each year?
Showing my novice understanding now.

You'd need to give a specific example to provide a full response.

Terms like net asset value are normally associated with closed ended instruments like investment trusts. In these cases they are companies that have a limited number of shares, but hold shares , bonds etc of other companies and institutions, so the value of the company may well vary from the value of all of its assets and holdings, in which case the nav is what the sum of the holdings is worth, which may be less or more than the value of the actual investment trust.

Bond fund returns will be based primarily on two parts, one is the actual interest paid on the individual binds held. However the other part is the price at which the bonds trade and this is probably what has been producing the large fluctuations you've noted. A bond may be issued with an interest rate or coupon of say 5% when base rates are at 5%. After a time base rates might fall to say 1%, and then that interste rate becomes far more attractive to investors. The bond has been issued at a set value, but now investors are more than happy to receive 2.5% interest given what you could get elsewhere in the market, whether in bank accounts. New bond issues etc. in that case the actual bond would trade at double its issue value, and so if that happened over a year the return on the bond in that year would be over 100%. An element of this has happened over the last few years as base rates have dropped And remained low, and elements of the market have been risk averse and just want somewhere 'safe'.

Going forward then something near the reverse could happen, meaning that bond values could reduce as interest rates rise, and people won't accept the low returns.

All food for thought when investing.