VLS not on Halifax SD?

Audaxer

ValiantSon wrote: »

The £50,000 protection is only of use in instances of corporate fraud or negligence, so it is incredibly unlikely that it would be called upon. It isn't like the £85,000 on retail deposits. In the latter instance you are a creditor, in the former you are not. The chances are that should there be fraud because of an unscrupulous employee the institution would actually cover you anyway because a) most would likely feel morally obligated to do so, and b) the reputational damage of not doing so could be devastating to their business.

I agree the risk is very low, but it's still a risk. I'm not sure they would feel morally obliged to compensate you, and if it was just a few investors that lost funds through the fraud, I'm not sure that it would get the publicity that would do them reputational damage.

ValiantSon

Audaxer wrote: »

I agree the risk is very low, but it's still a risk. I'm not sure they would feel morally obliged to compensate you, and if it was just a few investors that lost funds through the fraud, I'm not sure that it would get the publicity that would do them reputational damage.

There are, undoubtedly, many businesses that would not feel a moral obligation, but I think the majority would. Furthermore, legal action could be taken against the company to recover losses and they are unlikely to want to have to go down that route.

Any fraud is likely to involve a large number of customers (unless the fraudster is a complete idiot). The spread of impact, therefore, is almost certainly something that would gain media attention (and it is well within the power of individuals to generate attention). The reputational damage is a significant risk.

Audaxer

Alexland wrote: »

Well if you held both in equal proportions you would have a smaller circa 15% UK weighting. VLS prefers government bonds and HSBC prefers corporate bonds you would be sitting on the fence there too.

That's true, which I think is beneficial and diversifies further rather than having all my eggs in the one basket.

Alexland

Audaxer wrote: »

That's true, which I think is beneficial and diversifies further rather than having all my eggs in the one basket.

Yes but 50:50 split between VLS60 and GS Balanced is more than 1 notch above the risk scale than your current VLS40. With the higher equity exposure and corporate bonds GS Balanced is somewhere near VLS70 (if it existed) on the risk scale. So your 50:50 split would give somewhere near a VLS65 risk - about 25% higher than VLS40.

Audaxer

Alexland wrote: »

Yes but 50:50 split between VLS60 and GS Balanced is more than 1 notch above the risk scale than your current VLS40. With the higher equity exposure and corporate bonds GS Balanced is somewhere near VLS70 (if it existed) on the risk scale. So your 50:50 split would give somewhere near a VLS65 risk - about 25% higher than VLS40.

I currently have both VLS40 and VLS60 - with double the amount in VLS60. My wife has HSBC GS Bal, a smaller amount still. The VLS40 was my first purchase and I think I was a bit over cautious, so was thinking we should go 60% equities, and rather than put it all in VLS60, thought maybe best to split half and half between VLS and HSBC, and would just be over 60%.

I'm surprised you consider HSBC GS Bal much higher risk than VLS60, but you might be right with the corporate bonds. However the fact that the allocation is managed and more flexible than VLS might mean it's less of a risk and may drop less than the VLS60 in an equity crash and recover quicker?

Alexland

Yes HSBC GS Balanced seems to be between VLS60 and VLS80. It had 63% equities and the bonds carry greater correlation with equities and potential return.

I agree the VLS40 sounds very cautious but we are at different stages of life and I know you are very cautious about the FSCS limits - although £50k is also the value at which the Halifax SIPP charges double from £90 to £180 per year which I guess you are keen to avoid.

I don't get the feeling that Jane Davies takes a very active approach and from what I read online she had a fairly static asset allocation and sees the HSBC Open Funds series as solutions. Definitely no stock picking going on.

Alex

Thrugelmir

The withdrawl of the the funds, well at least the availbility to trade online. With selling only available by phone. Is most likely down to MiFID 2. With the more onerous regulatory requirements seems as if there's been a considerable shake up.

Audaxer

Thrugelmir wrote: »

The withdrawl of the the funds, well at least the availbility to trade online. With selling only available by phone. Is most likely down to MiFID 2. With the more onerous regulatory requirements seems as if there's been a considerable shake up.

I think the fact that the VLS funds were not available to buy or sell for short periods was more down to a fault in the HSD website.

Audaxer

Alexland wrote: »

Yes HSBC GS Balanced seems to be between VLS60 and VLS80. It had 63% equities and the bonds carry greater correlation with equities and potential return.

I'm surprised then that the HSBC GS Balanced performance has had more or less the same performance as the VLS60 over the past 5 years. As they have slightly more equities and higher performing bonds I would have thought the HSBC performance would exceed the VLS60 in a bull market.

I agree the VLS40 sounds very cautious but we are at different stages of life and I know you are very cautious about the FSCS limits - although £50k is also the value at which the Halifax SIPP charges double from £90 to £180 per year which I guess you are keen to avoid.

I didn't know that, but the SIPPs we have are not with Halifax, just our S&S ISAs.

I don't get the feeling that Jane Davies takes a very active approach and from what I read online she had a fairly static asset allocation and sees the HSBC Open Funds series as solutions. Definitely no stock picking going on.

Maybe it's just the Corporate Bond part of the fund that is actively managed and that the fund's equity allocations remain the same.

Alexland

Audaxer wrote: »

I'm surprised then that the HSBC GS Balanced performance has had more or less the same performance as the VLS60 over the past 5 years. As they have slightly more equities and higher performing bonds I would have thought the HSBC performance would exceed the VLS60 in a bull market.

Although the 5 year annualised returns are similar at 9.7% the HSBC GS Balanced has done better on the 1 and 3 year annualised returns. The main difference seems to be in 2013 when VLS60 did about 1.5% better for some reason.

Audaxer wrote: »

Maybe it's just the Corporate Bond part of the fund that is actively managed and that the fund's equity allocations remain the same.

There is more information about the HSBC Tactical Asset Allocation 'TAA' in the fund brochure:

http://www.assetmanagement.hsbc.com/uk/attachments/advisers/fund-range/hsbc_global_strategy_portfolios_brochure.pdf