FTSE 100 and other trackers

Glen_Clark

switch76 wrote: »

The FTSE 100 trackers seem to return about 4.5%-5% on average. I'm open to other trackers but if sterling strengthens it might wipe out most of the gains of things like world trackers.

On the face of it the FTSE 100 is good value. But the more you find out, the more confused you get. Yield is past performance, its the future that matters. Also the tax system in the US apparently favours investment and share buybacks rather than paying out dividends, making capital appreciation more likely.

dunstonh

It should be noted that Sterling has been ripe for a devaluation for a while. It was higher than most people thought it should be given the UK balance of payments. So, Brexit vote gave it the push it needed but its unlikely to return to the previous level until the UK finds a way (if) to improve exports and reduce imports.

Glen_Clark

dunstonh wrote: »

It should be noted that Sterling has been ripe for a devaluation for a while. It was higher than most people thought it should be given the UK balance of payments.

As I understand it, Sterling was given a temporary boost by the floods of dirty money coming into London to buy property due to Opaque ownership laws, low Council Tax (Westminster) and Government intervention in the housing market to maintain high house prices. That couldn't continue because once the property is sold, planning restrictions prevent building more.

dunstonh wrote: »

(Sterling) is unlikely to return to the previous level until the UK finds a way (if) to improve exports and reduce imports.

I have an idea. Lets join the EU

BobQ

switch76 wrote: »

I'm interested in buying a FTSE 100 tracker and wondered if you could recommend one. I'm looking to get a better return than locking away money in a bank.

.

How much of your savings are you planning to put in this FTSE venture? 1% 10%, 50%?

It is an interesting strategy to invest in tracking a single index when it is almost at its highest point ever. I would start with a global growth fund.

Glen_Clark

BobQ wrote: »

It is an interesting strategy to invest in tracking a single index when it is almost at its highest point ever. I would start with a global growth fund.

I think you will find global growth funds close to their highest point ever (when priced in Sterling) too

switch76

BobQ wrote: »

How much of your savings are you planning to put in this FTSE venture? 1% 10%, 50%?

It is an interesting strategy to invest in tracking a single index when it is almost at its highest point ever. I would start with a global growth fund.

About 10%. The timing is awkward but that's when the money from the savings account matures. That's why I was asking if the FTSE 100 is expensive compared to its usual P/E. I'm thinking of putting the money in stages over several months.

switch76

What are the differences between these 2 funds? The 1st one has lower fees doesn't it? Any better funds than this?

https://www.halifaxfundscentre.co.uk/index.php?section=sheet&idShareclass=F00000OOAS

https://www.halifaxfundscentre.co.uk/index.php?section=sheet&idShareclass=F0GBR04CPU

Since several people have mentioned a world tracker, are there any you can recommend from that website? Any good US trackers since that is a foreign market that gets a lot of coverage?

bowlhead99

switch76 wrote: »

What are the differences between these 2 funds? The 1st one has lower fees doesn't it?

Correct: same objective and strategy, same manager, cheaper fees.

Any better funds than this?

Yes, all the ones that don't just put all your money in 100 equities listed on one single country's stock exchange, heavily weighted to the largest companies within that 100, ignoring the other thousands of companies listed in that country which aren't in the 100, ignoring every other company in all the other countries that make up the other 94% of the world's investible equity market capitalisation, and ignoring every other asset class such as government and corporate bonds and direct property.

As alluded to by the other posters above.

Since several people have mentioned a world tracker, are there any you can recommend from that website?

In post #5 Glen posted a link to a discussion on another thread which discussed the merits of the cheapest world trackers

Any good US trackers since that is a foreign market that gets a lot of coverage?

The US is indeed a foreign market. And there are lots of good US trackers.

But single-country trackers (whether US 2000 or US S&P500 or US DJIA30 or or UK100 or UK All-Share) are not designed to be held by themselves, because they are highly specialist funds designed to be held as part of a wider portfolio with other geographic regions and other asset classes.

If you have already accepted the idea of a world tracker - or at least a more balanced fund than the UK FTSE100 - why go and pick another specialist fund like a US tracker? Are you going to also get a Europe tracker and a Japan tracker and a developed Asia-exJapan tracker and an Emerging Markets tracker and a UK bonds tracker and an overseas bonds tracker and a real estate tracker and so on and so on? And how would you decide how much to put into each? It would seem like there is a strong case for buying a single managed multi-asset fund.

switch76

Because US trackers seem to outperform global trackers. There doesn't seem to be a huge outperformance between global trackers and the FTSE 100 trackers from the ones I've seen so far.

I have enough diversity in the equities I hold. I'm not going to buy lots of funds. Just one or two.

HHarry

Ishares FTSE 100 ETF is available (ISF.L). I held mine through Hargreaves Lansdown - £11.95 to buy, and the same when you come to sell.

I agree with the others about considering your options. That's quite a specific sector, at it's peak. Although I'm not sure there are any 'bargains' at the moment.