S&S ISA by financial advisor - opinions needed

bostonerimus

ValiantSon wrote: »

T
Over the last five years the performance of the two funds is actually very similar, with HSBC being the slightly better performing. Of course, all of this has happened during an equity bull market, so the government bond weighting of VLS has probably had a slight drag on returns, compared to the corporate bond weighting of HSBC. In a bear market, the corporate bond weighting in HSBC might result in sharper falls than VLS, as corporate bonds are significantly riskier than government bonds, and a downturn in equities is likely to result in a downturn in corporate bonds too. None of this is to say that you shouldn't invest in HSBC. I actually think that the HSBC fund is a good one.

People get too hung up comparing returns from funds. There will always be variation, but if one year your fund returns 15% and your friend's choice increases by 20% it really says very little about your relative abilities, or personal worth. More attention should be paid to whether your portfolio is working well enough to meet your financial goals, not some outside metric set by year end league tables of your friend's portfolio. As long as you have a sensible asset allocation, keep fees down and save regularly you'll probably succeed. So HSBC or VLS are just fine fund families, buy either.

ValiantSon

bostonerimus wrote: »

People get too hung up comparing returns from funds. There will always be variation, but if one year your fund returns 15% and your friend's choice increases by 20% it really says very little about your relative abilities, or personal worth. More attention should be paid to whether your portfolio is working well enough to meet your financial goals, not some outside metric set by year end league tables of your friend's portfolio. As long as you have a sensible asset allocation, keep fees down and save regularly you'll probably succeed. So HSBC or VLS are just fine fund families, buy either.

That's more or less what I was saying. My only addition was to highlight some of the differences in asset allocation, which will have an effect on how the fund performs in different market conditions. Nonetheless, what I was actually saying was that the HSBC fund was a good one, and so was VLS.

capital0ne

dunstonh wrote: »

It will cost you £2000.
it will cost you £2000.
Actually, for you, make it £20,000 as I have got to the stage in my career where I can choose who I deal with.

Cheers Dunsty, let me have your account number and sortcode and I'll do the transfer as soon as.

Audaxer

bcfclee27 wrote: »

Thank you for your help.
As said above I think I will do half and half and see how that goes with the view of moving it all over to me if I do ok in the future.

I cannot really decide on VLS60 or HSBC Global strategy.
Is there any disadvantage from splitting the two and go half in each ?

I don't think there is any problem splitting between the 2 funds. I've done something similar, although not quite half and half as I still have a lot more in VLS than in HSBC. I just don't like having all my eggs in the one fund/basket as the Financial Services Compensation Scheme only covers up to £50k for each fund house. A minimal risk than anything like a major fraud will affect your investments at Vanguard or HSBC, but better safe than sorry in my view.

BananaRepublic

ValiantSon wrote: »

What exactly is that supposed to mean?

It means you don’t have a clue what the IFA is doing. What I wrote was quite simple to understand for someone with basic knowledge of investing.

BananaRepublic

ValiantSon wrote: »

Thanks for that.

You are talking rubbish, of course. You do know what snake oil is, I assume?

The IFA portfolio is sold with the claim that it will do better than self-investing through a multi-asset tracker. From everything that I can see about this portfolio there is no evidence to support that and therefore this meets the criteria to be described as snake oil.

Nevertheless, thank you for another of your charming posts.

What do you expect me to say when you make false and outlandish claims? The IFA portfolio was not sold with the claims you state. It is not snake oil. The latter is something worthless but with magical benefits. To suggest that the IFA has sold snake oil is ignorant and false. Regarding your last paragraph, you need to look in the mirror.

ValiantSon

BananaRepublic wrote: »

It means you don’t have a clue what the IFA is doing. What I wrote was quite simple to understand for someone with basic knowledge of investing.

No it wasn't. I do have "basic knowledge of investing" and I didn't know what you were talking about. Your English let you down.

ValiantSon

BananaRepublic wrote: »

What do you expect me to say when you make false and outlandish claims? The IFA portfolio was not sold with the claims you state. It is not snake oil. The latter is something worthless but with magical benefits. To suggest that the IFA has sold snake oil is ignorant and false. Regarding your last paragraph, you need to look in the mirror.

Whatever.

"Snake oil - noun
a product, policy, etc. of little real worth or value that is promoted as the solution to a problem."

What I said isn't false, it is an opinion. It also isn't ignorant. You disagree and that is fine, but I didn't insult you for disagreeing and you did. Your behaviour was childish.

bostonerimus

BananaRepublic wrote: »

Just because your portfolio does better does not mean the IFA is pants. She will find a product that matches your risk level, so statistically it might be better, but not in real life with unexpected events.

Yes, comparing portfolios is a pretty fruitless task unless it is done on large enough samples so that the statistics become meaningful. However, the OP has been sold a pretty bog standard portfolio and is paying 2% for it. I think that's an outrageous waste of money and that maybe the IFA took a bit of advantage or even worse that's just how they do business and they actually believe they are providing good service.........

Linton

Prism wrote: »

One thing to note is that VLS 60 has 70% of its bonds in government bonds and 20% corporate whereas HSBC Global Balanced is 65% corporate and 20% government bonds. The means that about 25% of the whole VLS is basically making no money but should be safe during a crash. HSBC is the more risky of the two which is probably why its performance has been better recently.

I think you may have missed a key difference between the funds. A difference that leads me to believe that the VLS60 fund is the more risky in its bond allocation. HSBC is very high in Corporate Bonds at the moment. At some point in the future the figures could be quite different. VLS60 doesnt have the choice as to its bond allocation. It is what it is.

At the moment safe government bonds are at extremely high prices. So high that people question whether they would be better off leaving the money in cash as the bond prices have little room to go higher and a very high likelihood of falling significantly at some time. So in my view a tactical move into lower risk corporate bonds and property makes a lot of sense at the moment. As does the Brewin Dolphin's use of Absolute Return funds. As and when interest rates rise, as they must do, the actively managed funds can change their allocation. VLSxx will carry on blindly.