Active Multi Asset Funds - Baillie Gifford Managed Fund a good option?

aroominyork

DennisTenus wrote: »

Are "multi-asset funds" funds of funds basically? LIke VLS80 for example?

Not necessarily. The Baillie Gifford fund's top ten holdings are a mix of funds and individual stocks:
Baillie Gifford Emerging Markets Bond Class C Gross (Closed) 5.14%
Baillie Gifford Emerging Markets Leading Companies Class C 2.37%
Amazon.com 1.39%
Baillie Gifford Emerging Markets Growth Class C 1.28%
Tesla 1.27%
Euro-Bobl Future Dec 17 1.12%
US Treasury 1.25% 30/06/2019 1.10%
Nestle S.A. 1.10%
Prudential 1.08%
Svenska Handelsbanken Series A, 1.06%

Alexland

aroominyork wrote: »

Not necessarily. The Baillie Gifford fund's top ten holdings are a mix of funds and individual stocks:
Baillie Gifford Emerging Markets Bond Class C Gross (Closed) 5.14%
Baillie Gifford Emerging Markets Leading Companies Class C 2.37%
Amazon.com 1.39%
Baillie Gifford Emerging Markets Growth Class C 1.28%
Tesla 1.27%
Euro-Bobl Future Dec 17 1.12%
US Treasury 1.25% 30/06/2019 1.10%
Nestle S.A. 1.10%
Prudential 1.08%
Svenska Handelsbanken Series A, 1.06%

Agreed and some multi asset funds also directly hold fixed interest investments rather than entirely within sub-funds.

DennisTenus

Thanks. Wasn't sure whether to start another thread on this but it's related to picking funds....

In my IWeb S&S ISA i'm trying to pick only a few funds to split the money between to save on costs and keep them to the absolute minimum. So I have 1K in Fundsmith, 1K in VLS80 and 500 in LEGG MASON INV FDS IF JAPAN.

I have some more money in there for investment remaining...would the Baillie Gifford fund's be a good pick to spread risk/diversify my portfolio?

Audaxer

aroominyork wrote: »

Not necessarily. The Baillie Gifford fund's top ten holdings are a mix of funds and individual stocks:
Baillie Gifford Emerging Markets Bond Class C Gross (Closed) 5.14%
Baillie Gifford Emerging Markets Leading Companies Class C 2.37%
Amazon.com 1.39%
Baillie Gifford Emerging Markets Growth Class C 1.28%
Tesla 1.27%
Euro-Bobl Future Dec 17 1.12%
US Treasury 1.25% 30/06/2019 1.10%
Nestle S.A. 1.10%
Prudential 1.08%
Svenska Handelsbanken Series A, 1.06%

Are the underlying funds subject to an ongoing charge as well as the main fund? So although the Multi Asset fund at 0.44% seems very cheap, is there another layer of charges underneath?

Alexland

DennisTenus wrote: »

In my IWeb S&S ISA i'm trying to pick only a few funds to split the money between to save on costs and keep them to the absolute minimum. So I have 1K in Fundsmith, 1K in VLS80 and 500 in LEGG MASON INV FDS IF JAPAN.

I have some more money in there for investment remaining...would the Baillie Gifford fund's be a good pick to spread risk/diversify my portfolio?

With that sort of money I would just pick one fund and be on a percentage fee platform where I could contribute without incurring trade costs. So if you picked the VLS then I would suggest Vanguard Investor at 0.15% and if you wanted wider choice Cavendish Online at 0.25%. Paying trade fees on sums like £500 is expensive unless you really intend to keep these holdings for a very long time.

Alex

Alexland

Audaxer wrote: »

Are the underlying funds subject to an ongoing charge as well as the main fund? So although the Multi Asset fund at 0.44% seems very cheap, is there another layer of charges underneath?

The costs for the fund of funds include the weighted charges from the funds within. If the multi asset fund doesn't have any direct holdings it is incredibly cheap to administer and the majority of the costs come from the sub funds. So if a multi asset fund has heavy US/UK fund weightings it should be cheaper than one with heavy Asia and EM fund exposure where costs are higher.

DennisTenus

Alexland wrote: »

With that sort of money I would just pick one fund and be on a percentage fee platform where I could contribute without incurring trade costs. So if you picked the VLS then I would suggest Vanguard Investor at 0.15% and if you wanted wider choice Cavendish Online at 0.25%. Paying trade fees on sums like £500 is expensive unless you really intend to keep these holdings for a very long time.

Alex

Ignoring the figures if I do want to split my portfolio adding 1 or 2 more funds what would be good ones to complement my existing holdings?

bowlhead99

DennisTenus wrote: »

Ignoring the figures if I do want to split my portfolio adding 1 or 2 more funds what would be good ones to complement my existing holdings?

Ideally funds that hold assets which your existing holdings do not.

Consider all the different types of investments that can be made across different asset classes. Equities of large companies, midcap companies, small companies, micro/fledgling companies; public equities and private equities in every industry sector; government bonds, investment-grade corporate bonds, high-yield corporate bonds. All of the above in developed markets or emerging markets or frontier markets in all corners of the world. Infrastructure projects, property funds, alternative credit; commodities; hedge or absolute-return funds; the list goes on.

At the moment what you have is:

[VLS 80] a pile of global largecap equities with a smattering of bond indexes, with the equities broadly allocated between countries in line with their market size with some 'home bias' to UK-listed companies;

[Fundsmith] a concentrated conviction-driven portfolio of equities meeting Terry Smith's favoured company criteria in US and Europe (>80% in the Consumer Staples, Technology and Healthcare sectors and >60% listed in the US);

[Legg Mason IF Japan] an active Japanese equities fund holding mostly small-to-medium market-cap companies.

The above are listed in order from most diverse to most specialist. If you want to 'complement' your existing holdings you should look at what you've currently got and consider funds that do not hold the type of assets you currently hold in the regions or industries you currently hold them.

For example, you might note that you don't really have any investments in smaller companies in Europe, UK, US or Asia ex-Japan. Or on the non-equities side you might note that you don't have an allocation to commercial property (other than the couple of percent of companies in the Vanguard indexes which happen to hold or develop investment property). Or you might want a small allocation to (e.g.) absolute return funds, private equity, infrastructure or precious metals.

Getting a balance is about covering all bases. However, with only a few thousand quid to play with, you are not going to get near to covering all bases and frankly it doesn't matter. If you have £2500 in your ISA, and you find a way to get an extra percent of gains (or avoid a percent of losses) on 10% of it, that's a couple of pounds improvement to your wealth over the course of the year, well done. But just order half a pint of beer less when you go to the pub on one occasion at some point over the course of the next financial year and you have achieved the same effect on your wealth, without needing to do one iota of research.

You did say to ignore the figures but at the moment it makes sense to put more of your new money into your existing well-diversified Vanguard multi asset fund (or perhaps Terry Smith's specialist equities fund if that is your preference) rather than into the Japanese one or a brand new one. The more complex your portfolio the more work it is to keep it balanced. Once you have £10k, £20k, £50k you could revisit.

DennisTenus

bowlhead99 wrote: »

Ideally funds that hold assets which your existing holdings do not.

Consider all the different types of investments that can be made across different asset classes. Equities of large companies, midcap companies, small companies, micro/fledgling companies; public equities and private equities in every industry sector; government bonds, investment-grade corporate bonds, high-yield corporate bonds. All of the above in developed markets or emerging markets or frontier markets in all corners of the world. Infrastructure projects, property funds, alternative credit; commodities; hedge or absolute-return funds; the list goes on.

At the moment what you have is:

[VLS 80] a pile of global largecap equities with a smattering of bond indexes, with the equities broadly allocated between countries in line with their market size with some 'home bias' to UK-listed companies;

[Fundsmith] a concentrated conviction-driven portfolio of equities meeting Terry Smith's favoured company criteria in US and Europe (>80% in the Consumer Staples, Technology and Healthcare sectors and >60% listed in the US);

[Legg Mason IF Japan] an active Japanese equities fund holding mostly small-to-medium market-cap companies.

The above are listed in order from most diverse to most specialist. If you want to 'complement' your existing holdings you should look at what you've currently got and consider funds that do not hold the type of assets you currently hold in the regions or industries you currently hold them.

For example, you might note that you don't really have any investments in smaller companies in Europe, UK, US or Asia ex-Japan. Or on the non-equities side you might note that you don't have an allocation to commercial property (other than the couple of percent of companies in the Vanguard indexes which happen to hold or develop investment property). Or you might want a small allocation to (e.g.) absolute return funds, private equity, infrastructure or precious metals.

Getting a balance is about covering all bases. However, with only a few thousand quid to play with, you are not going to get near to covering all bases and frankly it doesn't matter. If you have £2500 in your ISA, and you find a way to get an extra percent of gains (or avoid a percent of losses) on 10% of it, that's a couple of pounds improvement to your wealth over the course of the year, well done. But just order half a pint of beer less when you go to the pub on one occasion at some point over the course of the next financial year and you have achieved the same effect on your wealth, without needing to do one iota of research.

You did say to ignore the figures but at the moment it makes sense to put more of your new money into your existing well-diversified Vanguard multi asset fund (or perhaps Terry Smith's specialist equities fund if that is your preference) rather than into the Japanese one or a brand new one. The more complex your portfolio the more work it is to keep it balanced. Once you have £10k, £20k, £50k you could revisit.

Thank you very much for this

I should come clean, I didn't want to post the real amounts on an open forum, I have 70K+ to invest, I have 10K in Fundsmith, 10K in VLS80 and 5000 in LEGG MASON INV FDS IF JAPAN. So you see I feel like I should split the remaining 45 in 3/4 other funds?

DennisTenus

bowlhead99 wrote: »

For example, you might note that you don't really have any investments in smaller companies in Europe, UK, US or Asia ex-Japan. Or on the non-equities side you might note that you don't have an allocation to commercial property (other than the couple of percent of companies in the Vanguard indexes which happen to hold or develop investment property). Or you might want a small allocation to (e.g.) absolute return funds, private equity, infrastructure or precious metals.

Would you be able to suggest some to look at please? I don't really know how to find funds that fulfill that criteria.

Thanks!