Great British Invest off or Passive V Active Updates

ams25

Linton wrote: »

My view:
As always Asset Allocation is key. Whether a fund is active or passive is a minor factor. In the past year Linton Growth has suffered both from its high allocation to small companies and its relatively low allocation to US, and has underperformed VLS100. Whereas in each of the the previous 4 years it was ahead.


Another general factor is that the active portfolios tend to be higher risk and so would be expected to perform worse than the index funds in periods of economic difficulty or uncertainty. However if we didnt believe that these conditions only apply for significantly less than 50% of the time we wouldnt be investing at all.

Agree that asset allocation is the key determinant of performance. this is why, for this exercise, i tried to mirror the Vanguard LS 60 fund with a similarly allocated active mix of funds. that way we see more if active / passive is making a difference. so far it is, but not in the right direction. it could easily be the other way, but kind of underpins the argument that over the long term passive will probably do as well or better while in the short term you may over or under perform using active funds (and that's assuming you do research and avoid those without decent long term performance)

bostonerimus

ams25 wrote: »

I tried to mirror the allocations of Vanguard's Life Strategy 60 as closely as I could with active funds (same % for US, Japan etc) , and within my fund selections i have big winners (fundsmith) and losers (Woodford) and a fair few in between... the resulting average performance has been below LS 60. Of course if Woodford have been replaced by Lindsell Train UK and a couple of other changes it would be the other way around. But as we don't have crystal balls....

This is essentially why I'm an index investor. There will always be portfolios with better returns than mine and also some with worse returns...I don't have crystal balls...thank God, but I'm pretty certain I'm going to be in the middle of the pack.

Thrugelmir

Don't Let Your Granny Loose at the Dogs

£101,868

Includes cash balance of £2,646

No changes to the portfolio in the month.


Prices as of today. Dull month. 5 stocks ending on exactly the same prices as they started. Lull before the storm......

Prism

Thrugelmir wrote: »

Prices as of today. Dull month. 5 stocks ending on exactly the same prices as they started. Lull before the storm......

Any particular storm in mind ?

Thrugelmir

Prism wrote: »

Any particular storm in mind ?

A famous quote springs to mind........

“Bull markets are born on pessimism, grow on scepticism,
mature on optimism and die on euphoria.”
Sir John Templeton

Are markets holding up thanks to primarily retail investors chasing that elusive goal of yield........ Buying the top global equities. With 80% of trades (by value) in only 110 stocks . That's a very narrow investment range.

TBC15

For DiggerUK

£103,313

DiggerUK

Well, I decided to rebalance my portfolio.....from gold, to gold. After all that's the only option open to me.
Nothing of geopolitical or geofinancial significance to offer an explaination for the recent price rises.

The WGC report an uptick in gold demand of 4% in 2018. Here is their full year analysis.
https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2018

The LBMA fix has a March 1st 2018 to March 1st 2019 rise from £953 to £989, which as near as damn it is 4%. I usually find that the WGC report correlates price changes with demand changes. it recently peaked at *(£1300)..._
*Ergghh, very wishful thinking, try £1030.

bostonerimus

So here are some statistics

Active portfolios' average= 6.1%, stdev=5.2%
Passive portfolios' average = 4.8%, stdev = 2.3%

A_T

DiggerUK wrote: »

Well, I decided to rebalance my portfolio.....from gold, to gold. After all that's the only option open to me.
Nothing of geopolitical or geofinancial significance to offer an explaination for the recent price rises.

Chinese government has been buying gold.

Thrugelmir

A_T wrote: »

Chinese government has been buying gold.

Central banks appear to have been buying to protect themselves from the dominance of the US dollar and it's fluctuations. Many are holding a huge amount of dollar denominated debt. Emerging economies are vunerable to the future increases in US interest rates.