Beginner investing - mxed asset funds

vanbobble

Good evening all.

I have about £30k - £40k sitting in my current account which I would like to get invested. I would be looking to open up an ISA in my name and a separate one in my wifes name.

I am a novice investor so do not know much about financial markets

I would be looking to invest for 5 years or more, I may wish to cash in yearly gains (if realised) or may not as it is unlikely I will need them in the short term

I accept that the value of my investment may go up or down.. I would probably class myself as moderately adventurous.

I fear that a correction in the equities market may come sooner rather than later, and would like to avoid as far as possible any major losses in the short term. In light of that, and me being a novice investor I understand that a mixed asset fund / trust is probably a good starting place

I have read on here numerous comments regarding Vanguard Life Strategies, If I had to pick one now I think it would be the 60%

Having done a bit of research on Trustnet I have found 3 mixed asset funds / trust, which seem to have a varied mix of assets / sectors etc.. and which have all outperformed VLS 60% over the last 5 year period (notwithstanding the fees for these 3 options are between 1 - 2%. As far as I can see these are all 40 - 60% equities based

Seneca Global Income & Growth Trust
5 year gain - 101.8%
FE risk score 45
Please see page on Trustnet for asset allocation

Miton Global Opportunities Tust
5 year gain - 115.8%
FE risk score 78
Please see page on trustnet for asset allocation

Artemis Monthly Distribution fund
5 year gain - 82%
FE risk score 56
Please see page on trustnet for asset allocation

Just wondering if anyone has any experience with any of these funds, or any comments? As previously mentioned I do not have much experience with financial markets, so if any of these are more risky than the FE risk score suggests please explain.

If the above are relatively suited to my level of risk would it make sense in investing in all 3 on an equal basis to start off with.. Or would I simply be better just picking one, or going with Vanguard LS?

enthusiasticsaver

I have the Vanguard LS60 and the Artemis monthly distribution precisely because they have the same level of equities/bond/multi asset mix. The difference of course is the Artemis is an active fund so the charges are higher than the Vanguard LS60. I think you could say both have a similar level of risk as you pointed out the FE risk score.

The reason we have both is we use the Vanguard LS 60 as an accumulation fund and just leave it to grow whereas the Artemis monthly distribution pays out monthly dividends at around 4% to subsidise our pensions as we are early retirees. I also don't like to invest in just one fund at the level we are investing albeit they are well diversified.

No one knows whether there is a crash coming down the line and all the advice is don't time the market. Drip feed your investment in over a period of months if you are worried about crashes but personally I am still investing lump sums. If you are investing for the long term it won't matter.

apollo9

The other funds to try are the HSBC Global Strategy - balanced and the L&G Multi index. I think no 5 mirrors the VLS 60 in terms of risk.

In terms of a crash, who knows, but the theory says if you stay in the market long enough (>10 years) it should work out in the end.

Others will a lot of experience and knowledge will chip in. I only know enough to make mistakes lol

vanbobble

enthusiasticsaver wrote: »

I have the Vanguard LS60 and the Artemis monthly distribution precisely because they have the same level of equities/bond/multi asset mix. The difference of course is the Artemis is an active fund so the charges are higher than the Vanguard LS60. I think you could say both have a similar level of risk as you pointed out the FE risk score.

The reason we have both is we use the Vanguard LS 60 as an accumulation fund and just leave it to grow whereas the Artemis monthly distribution pays out monthly dividends at around 4% to subsidise our pensions as we are early retirees. I also don't like to invest in just one fund at the level we are investing albeit they are well diversified.

No one knows whether there is a crash coming down the line and all the advice is don't time the market. Drip feed your investment in over a period of months if you are worried about crashes but personally I am still investing lump sums. If you are investing for the long term it won't matter.

Knowing my luck it would happen once said drip feed is done and I would have made less gains in the meantime to buffer the loss!.. but thanks for this bit of advice - pound averaging strategy I believe?

I suppose I am not really needing a monthly income, it was the growth figures in Artemis that interested me.. although most funds would have dividends / income payments wouldn't they?.. is there any benefit to ones which would not?

Audaxer

I also have a VLS60 and VLS40 as well as Artemis Monthly Distribution as part of an income portfolio. If you do not need the income at present, I personally would pick the VLS fund over the Artemis fund. The Seneca and Miton ones you mention are Investment Trusts. I don't know anything about these particular trusts, but bear in mind that with ITs you are buying shares which means they are not covered by the Financial Services Compensation Scheme.

vanbobble

apollo9 wrote: »

The other funds to try are the HSBC Global Strategy - balanced and the L&G Multi index. I think no 5 mirrors the VLS 60 in terms of risk.

In terms of a crash, who knows, but the theory says if you stay in the market long enough (>10 years) it should work out in the end.

Others will a lot of experience and knowledge will chip in. I only know enough to make mistakes lol

Thanks for the reply.

Yes a friend sent me a link regarding the HSBC global strategy fund - I had a falling out with HSBC years ago over a current account.. then there was the whole Mexican money laundering business - but hey I guess you could say they go the extra mile for larger customers. Definitely one to bear in mind though.

vanbobble

Audaxer wrote: »

I also have a VLS60 and VLS40 as well as Artemis Monthly Distribution as part of an income portfolio. If you do not need the income at present, I personally would pick the VLS fund over the Artemis fund. The Seneca and Miton ones you mention are Investment Trusts. I don't know anything about these particular trusts, but bear in mind that with ITs you are buying shares which means they are not covered by the Financial Services Compensation Scheme.

Thanks for clarifying.. and YIKES I thought I had read trusts were covered by FSCS however you are correct they are not. From earlier research though I don't think it is very common for them to go bust, the only records I can see were of some split capital ones going belly up - Are there many trust investors on here? and what are your thoughts on the FSCS issue?

ColdIron

Four very different investments with different objectives, composition, structure, pricing and strategy, particularly the Milton one which looks very niche

To outperform 3 month LIBOR (the interbank lending rate) plus 2% over the longer term, principally through exploiting inefficiencies in the pricing of Investment Trusts.

I'd figure out what you want your investments to achieve and then look for funds that match it

bostonerimus

As a beginning investor I would recommend one of the large multi-asset open ended funds. My personal preference would be one made up of index trackers, something like VLS60.

I assume you've look at the fees you'll pay and understood them....also for Milton Global you'll be paying a premium of 1.6% and you're looking at a gross gearing of 107%....which isn't that high, but if you are unsure of the meaning or significance of those terms make sure you understand them before you buy. But as a beginner it can be dangerous to buy on the basis of past performance

vanbobble

ColdIron wrote: »

Four very different investments with different objectives, composition, structure, pricing and strategy, particularly the Milton one which looks very niche

I'd figure out what you want your investments to achieve and then look for funds that match it

Thanks for the reply.
Quite simply I would like to achieve the best growth possible in line with the amount of risk I am prepared to take, which would be more risk if the markets were not currently at an all time high. Whilst it does seem niche, there seems to be a reasonably mix of assets and the PE risk score does not seem far too high.. I will happily admit though that I do not really understand much of what would affect the type of assets the trust holds.

With regards to fees and gearing I believe I understand ok.. the 107 gross gearing effectively means that they can or currently do use 7% gearing is that correct? which I understand can make more profit but also more loss in a downturn - then there is the premium of course.

vanbobble

Based on the limited amount of time I had to look this weekend.. the 3 funds / trusts I mentioned simply seem to be unusually high performing with a risk score quite a bit below others producing the same gains. I do appreciate that past performance is not something to make a decision on, but given the mixed asset allocation, surely better than an 80% or 90% equities based fund making the same gains?