UK Funds vs US Funds

masamoah

I applied to Barclays due to the fact of the low fees, that was the main reason to be honest. Where platform do you suggest that i join for people for myself?
Kind Regards

masamoah

OK, i agree balanced is best. so for a World MSCI, what platforms offer this because i do not think Barclays do?

bowlhead99

All platforms (including Barclays) offer global funds.

Some of them will track the MSCI World index, some the FTSE All-World index and some of them will not aim to track a specific global index but will be actively managed with a global spread of investments determined by a fund manager (sometimes using indexes for particular regions, and some not).

snowqueen555

Bear in mind the global funds tend to be weighted towards the larger economies, it is quite usual for 50%+ invesment to be in USA, 20%+ in UK, the 30% everywhere else, with very small % in emerging markets, as they are getting hammered right now.

It is important to analyse the asset allocation, sector, type, and geographical breakdown of the fund you are investing in to see if it matches what you want.

tg99

economic wrote: »

people will say US stocks look overvalued etc etc, however the price is the price and theres a reason there is more demand for US stocks over UK stocks. I would say medium-long term US stocks will continue to outperform especially with the dollar continuing to rise.


why has it outperformed? capital flight. I don't see the world improving considerably and more likely to get worse (EU, Asia, EM etc). and where is a safe place to park capital now? bonds - no. cash - no. commodities - no way. only real place is US stocks.

There's also a reason that US has been underperforming Japan and Europe ex UK - financial conditions have been tightening in the US (via stronger USD for example) whereas Japan and Europe are still engaging in monetary easing (with more still to come imho). Plus valuations are a bit more attractive in Japan and Europe. Of course for a UK based investor then whether you are currency hedged or not has a big impact here.

Not ready to bite yet but at some point I'm looking at upping my EM exposure. Very difficult to call the exact bottom but sentiment is as washed out as it has been since the Asian crisis which might be a very good contrarian indicator.

UK performance relative to US will to some extent be driven by what happens next with commodity stocks.

economic

I'm not sure things are quite as bad as the asia crisis. in my view things can still diverage a lot more between US (and UK to a smaller extent) and EU/EM/Japan.

with USD higher this will only make things worse for EM as a lot of EM have borrowed in USD. the fed are stuck - do they raise rates to save the savers/pensioners and prevent domestic bubbles or do they keep rates low to prevent a global EM crisis (and even a bond crisis)?

given this and since its the start of the new year I want to put in practice my views to my own portfolio:

- stay clear of all bonds except 0 duration bonds (cash)
- invest in global index trackers on dips with heavier weighting on US/UK (NOT currency hedged) but be cautious about investing too much.
- start investing in commodity related assets as I think we will see a bottom in this commodities cycle this year (especially gold/oil).
- keep cash levels at around 50% of portfolio - good time to keep the powder dry.
- think about selling my property and move to a better safer area where demand will remain.

Thrugelmir

economic wrote: »

people will say US stocks look overvalued etc etc, however the price is the price and theres a reason there is more demand for US stocks over UK stocks.

Some US companies are borrowing to buy back their own shares. Retail investors in US sold over $140 billion of stock last year. Price moves aren't always what they seem.

economic

the market is always right. retail investors make a small part of the overall market. that's another reason to be bullish. usually you can spot a bubble when retail investors have piled into the market. its retail investors who always lose out on average in the stock market as they don't time it well.

tg99

economic wrote: »

I'm not sure things are quite as bad as the asia crisis. in my view things can still diverage a lot more between US (and UK to a smaller extent) and EU/EM/Japan.

with USD higher this will only make things worse for EM as a lot of EM have borrowed in USD. the fed are stuck - do they raise rates to save the savers/pensioners and prevent domestic bubbles or do they keep rates low to prevent a global EM crisis (and even a bond crisis)?

given this and since its the start of the new year I want to put in practice my views to my own portfolio:

- stay clear of all bonds except 0 duration bonds (cash)
- invest in global index trackers on dips with heavier weighting on US/UK (NOT currency hedged) but be cautious about investing too much.
- start investing in commodity related assets as I think we will see a bottom in this commodities cycle this year (especially gold/oil).
- keep cash levels at around 50% of portfolio - good time to keep the powder dry.
- think about selling my property and move to a better safer area where demand will remain.

can understand why you might expect continued divergence between US and EM but why have you lumped Europe and Japan in with EM above ?

Assuming there are no major global events that cause the Fed to alter policy (eg China / market gyrations from last Summer), they are primarily going to be driven by inflation in terms of how quickly they raise rates given that the other half of their mandate - employment - is not far off full capacity.

tg99

economic wrote: »

the market is always right. retail investors make a small part of the overall market. that's another reason to be bullish. usually you can spot a bubble when retail investors have piled into the market. its retail investors who always lose out on average in the stock market as they don't time it well.

The market isn't always right though, eg the price they set in late 99 / early 2000 wasn't 'right' - albeit easy to say with hindsight I know! Retail investors havent really embraced the market rally since 2009 so that warning sign is not yet flashing thankfully.