Great British Invest off or Passive V Active Updates

Thrugelmir

bostonerimus wrote: »

Just a quick observation. After about 15 months the active funds have an average return of 0.5% and a standard deviation of 4.19% and the passive is at an average return of -0.16% with a standard deviation of 2.6%, I did not include my $ based returns so we are comparing like with like. So maybe this is starting to show the greater spread of returns with active trading as compared to the portfolios following the indexes chosen, or maybe it just reflects the asset allocations. The average DIY active portfolio is slightly ahead of the average passive portfolio, but it's far smaller than a single standard deviation and that would be wiped out by any one paying for management....of course the manager could have done better than the DIY active folks here, but they might have done worse too.

So for now there are arguments on both sides and IMHO no enormous differences. But now that we are flirting with a bear market the active folks will have a chance to do some stock picking and buy low.

The differences will become apparent after an extended period of time. Active investment by it's very nature is looking for undervalued assets. Until sentiment changes towards the stock then performance will continue to lag. Likewise the size of tracker funds excludes them from buying companies below a certain capitalisation threshold. Divergence may well continue until investment fads change. Even Jack Bogle has reservations as to the growth in tracker dominance. When trackers become the market, who will set stock prices? Markets require active trading with differing views to function fully.

bostonerimus

Thrugelmir wrote: »

The differences will become apparent after an extended period of time. Active investment by it's very nature is looking for undervalued assets. Until sentiment changes towards the stock then performance will continue to lag. Likewise the size of tracker funds excludes them from buying companies below a certain capitalisation threshold. Divergence may well continue until investment fads change. Even Jack Bogle has reservations as to the growth in tracker dominance. When trackers become the market, who will set stock prices? Markets require active trading with differing views to function fully.

Agreed, as a passive investor I'm glad that active investing is still popular.
I know it's still early and the sample is small, but I'm not surprised by any of the data after just over a year. I expect to see the active funds with greater spread in returns compared to the passive and I imagine the average returns will continue to be quite close.

Thrugelmir

Don't Let Your Granny Loose at the Dogs

£100,517

Includes cash balance of £2,255.

No changes to the portfolio in the month.


Been an interesting month, was an unexpected bounce back. Expect the volatility to continue.

Prism

Prism Global

£109,122

Sold my last passive fund (L&G health) at the start of the year so now I am all active for the time being

TBC15

TBC15 £109,220

BLB53 £103,292

DiggerUK £105,137

I’m quite happy with how Fundsmith is handling the bumps in the road.

I’ll be pulling the plug on my tech tracker in the near future and putting the proceeds into AXA.

Linton

Linton Growth £104139
Linton WP £98520

bostonerimus

Jan 31st totals, I have done nothing to my portfolio since Oct 2017

Bostonerimus $104257.......+4.3%
Boston£ £105892......+ 5.9%

I started with

US Total Market Equity 50%
Global Market Equity 25%
US Bond Index 25%

I and now
US Total Market Equity 51.5%
Global Market Equity 22.9%
US Bond Index 25.6%

The Global Market Equity has been a dud....maybe time to rebalance and buy when it's low? If I'd been rebalancing quarterly my gains would have been 4.5%, so if transaction costs are low it might have been worth it.

A_T

A_T's British Bulldog

£99,678
-0.3%

UK Gilts up 3.88% since the start - all the equity funds are in the red.

ams25

Ams25 active 60:40: 100505
Vls 60:40: 103292

finellah

Finellah 7.3
Finellahvls80 3.7
Vanguard all cap 4.9