SIPP Question?

dunstonh

Picking random selections and weightings usually results in lower returns than just going with a multi-asset fund.

So, why do you think your random low-knowledge management decisions are going to result in better returns than the multi-asset fund that will be built to follow a strategy?

Prism

dunstonh wrote: »

Picking random selections and weightings usually results in lower returns than just going with a multi-asset fund.

Is that true for most multi-asset funds though when the choices aren't totally random? The good passives ones are fine but even then you could have doubts over regional asset allocation such as the VLS UK bias.

I have yet to see an active mutli-asset fund that covers all bases. They tend to use a very limited set of funds, often from their own house. I haven't found it too hard to put together a range of diverse active funds in a fairly balanced way. There was certainly some randomness to my choices based on a mix of past performance, manager style and gut feeling.

Filo25

Prism wrote: »

If you do go for the Legg Mason IF Japan fund be prepared for some serious volatility. +/- 3% daily changes are fairly regular but so far it has performed really well. Its my strongest holding

Of all the funds I have in my newbie portfolio, I have to admit that is the one I do question myself on given the high volatility!

Just starting out with mine now and am finding it interesting to compare returns to a 100% equity global fund like VLS100 and also comparing to a collection of passives with similar market allocations to get at least a very high level idea of how much performance variance is being driven by market level decisions on asset allocation and how much by fund performance v passives (I'm only passive in North America and underweight there).

Still have a lot of learning to do but its certainly easier to learn when you have some money invested and a motivation to keep educating yourself!

Allegedly my volatility is similar to VLS100 if I believe Trustnet, although not sure how reliable a measure that is!

dunstonh

Is that true for most multi-asset funds though when the choices aren't totally random? The good passives ones are fine but even then you could have doubts over regional asset allocation such as the VLS UK bias.

It is all about strategy. If there is logical reasoning then that is your strategy.

I have yet to see an active mutli-asset fund that covers all bases. They tend to use a very limited set of funds, often from their own house.

Fettered fund of funds are usually worth avoiding unless it is underlying passives.

aroominyork

Kaiser71 wrote: »

Thanks for the replies. I think I may just do that and the reduce the UK fund down a bit, and add some % to Emerging Markets or India/Japan funds.

India is an emerging market, Japan is not. So what you might mean is to add some % to Emerging Markets/India and/or to Japan.

IanManc

dunstonh wrote: »

Picking random selections and weightings usually results in lower returns than just going with a multi-asset fund.

So, why do you think your random low-knowledge management decisions are going to result in better returns than the multi-asset fund that will be built to follow a strategy?

I like the description I've highlighted.

It is only when you realise how little you actually know that you begin to start to understand investing.

And yes, I'm speaking from experience.