How To Own The world. New fund

aajax42

I have just finished reading How to Own the World and felt there were some very compelling suggestions for wealth management and creation within it. The author has now teamed with others and created a new fund based upon strategies proposed in the book. The fund is ' VT-PEF-Global-Multi-Asset-Fund'.
It is brand new, but I am leaning toward getting involved. Any thoughts you learned people?

ColdIron

An OCF of 1.14% seems a lot for a basket of EFTs

dunstonh

Return to date is underperforming sector average. However, it has only ben two weeks Plus, its the flexible sector. So, sector average means absolutely nothing.

OCF seems high for the underlying assets. However, as a niche fund with limited marketing potential and multiple parties involved, you would expect it to be more expensive. They do say they aim to get it under 1% by £75m under management.

I cant see anything that excites me about it. It is too expensive with no track record or understanding of investment style. it is up against cheaper and more established multi-asset offerings.

If you have read the book and swallowed its mantra and joined that church then you would have the faith to invest. If you haven't read it, then there is no reason to go with it on such limited info.

Bizarrely, they are marketing it to advisers as a low cost option saying: "The VT PEF Global Multi-Asset fund offers this diversification for a relatively low cost, freeing up advisers' time to manage and analyse strong but more volatile growth opportunities for their clients." They seem to be pitching it up against DFMs rather than other multi-asset funds.

Good luck but not for me. Although I am generally negative towards fund launches as it's a crowded market and most seem to end up being mediocre. at least to begin with. It could end up being wonderful but you only have faith to go on at this stage.

BananaRepublic

I take a very conservative approach, and don't like to be a guinea pig. For me the track record is all. Marketing bumf, such as a book, means nowt.

bostonerimus

I see no reason to buy this over any other well diversified multi-asset fund and the fees and lack of track record are two good reasons not to buy it. There are new funds all the time......I haven't worried about any of those for the last 20 years, I just keep buying and reinvesting in my boring and inexpensive index funds. There'll be another new fund along soon and I'll ignore that one too.

bostonerimus

FYI the backtested return for this new fund given in the fund brochure is an annualized 7.22% from 2001 to 2017. My simple passive approach has produced an annualized 8.78% return over the same period. So I see no reason why this fund would stand out from the crowd, as I surely don't - by design.

aajax42

ColdIron wrote: »

An OCF of 1.14% seems a lot for a basket of EFTs

But isn't what's in the basket the crucial issue here?

ColdIron

aajax42 wrote: »

But isn't what's in the basket the crucial issue here?

But could you not obtain the same goods in a cheaper basket? A principal advantage of ETFs is their low cost, it just strikes me that you are paying a lot for the management of what's in that basket

Malthusian

Due to the young age of the fund I haven't been able to find a list of its holdings. However, on Plain English Finance's website they show an example portfolio recommended by their company which contains only four funds - 7IM Adventurous, Fundsmith Equity, and two ETFs in physical gold and physical silver. (The proportions aren't shown.)

Nothing wrong with that but it makes me suspect that it would not be particularly hard to replicate their fund's holdings yourself and cut off the whopping 0.9% annual management charge.

bowlhead99

Malthusian wrote: »

Due to the young age of the fund I haven't been able to find a list of its holdings. However, on Plain English Finance's website they show an example portfolio recommended by their company which contains only four funds - 7IM Adventurous, Fundsmith Equity, and two ETFs in physical gold and physical silver. (The proportions aren't shown.)

Nothing wrong with that but it makes me suspect that it would not be particularly hard to replicate their fund's holdings yourself and cut off the whopping 0.9% annual management charge.

That is of course the same with any fund-of-funds investment: if you know what to buy and why and when, you can just do it yourself - the fees for investment selection will typically be greater than the saved costs of your centralised admin unless you are only investing really small amounts where it costs you to be trading ETFs etc with no economies of scale.

Of course, they would say the value is in knowing what to buy when and in what ratio mix and at what price and their investment thesis / strategy / rationale is probably more researched and well-informed than some of the DIY investors on here who slap together a portfolio of five to ten funds because they think they like the sound of each of them. So the 1% fee might be buying you something more than just a bit of saved effort or trading costs.

You could copy them by waiting a month or three to publish what they have done and then buying that same mix - but you would be following along somewhat blindly without knowing where you were going or why and would get a different result due to the timing of your changes vs theirs.

Personally I don't tend to use fund-of-funds (preferring to select my own investments) unless they are offering me something I really can't do by myself - e.g. access to private equity funds or other alternative asset classes. If it's not practical to get direct access myself in the investment size I want, then no harm in using a middleman to facilitate it and handle the detailed investment selection, admin and collate the reports and summarise for me in their own reports.

bostonerimus

The proposed asset mix is in their brochure on page 21 and it can be downloaded here.

https://plainenglishfinance.co.uk/funds/

They have backtested this to 2001 and got an annualized return of 7.22% which certainly isn't a reason to rush and buy it. It has been pretty easy to beat that return with a few index funds and very little work.