HSBC Global & VLS60

Audaxer

bcfclee27 wrote: »

Was reading the below earlier and noticed this investor liked the HSBC balanced as a comparison to the VLS 60 however didn't like the nearing 30% allocation to corporate bonds.

I noticed that the dynamic funds have considerably less in corporate bonds than the balanced and just wondered people's opinions on this....

http://diyinvestoruk.blogspot.co.uk/2017/06/a-look-at-hsbc-global-strategy-fund.html

I have read that corporate bonds are perhaps more volatile so may do worse than government bonds in a falling market, but on the other hand people say government bonds are not the place to be right now. I was therefore thinking I should up my HSBC investment and reduce my VLS exposure as I have much more in VLS therefore more government bonds. As I don't really know which will bonds be better in the long term, I still think probably best to go 50/50 with the VLS60 and HSBC GS Balanced, but that is just my opinion.

Alexland

If you are looking for more probability of beating the mortgage rate by retirement then consider investing to 60 in the S&S Lifetime ISA for the initial 25% bonus.

The problen with government bonds is that they are currently so expensive with such low return it is hard to see any possibility of upside. Still who knows for sure what might happen next.

Alex

bcfclee27

Ok so current thoughts are now to split my 40k over the 4 funds that I've been deliberating over...

10k - HSBC Global Strategy Dynamic
10k - HSBC Global Strategy Balanced
10k - VLS 80
10k - VLS 60

This way I have all bases covered and the mix is roughly 70/30 Equities/Bonds.

If I go this route as opposed to choosing just 2 funds are my costs going to go up significantly or not worth worrying about ?

They will go into 4 separate General Investment Accounts and then be transferred over to S&S ISAs. Am I able to do this over 2 financial years or can you only choose one fund for the money to go into per financial year...
IE this April could I put 10k in VLS 60 and 10k in VLS 80 or can it only be one fund per year up,to 20k - hope this makes sense !!!!

Thanks

Prism

bcfclee27 wrote: »

If I go this route as opposed to choosing just 2 funds are my costs going to go up significantly or not worth worrying about ?

The costs are only higher if your platform charges for dealing. Assuming you are just buying once and then selling one each year to place into an ISA the fees shouldn't be high. If you were adding a small amount each month to all 4 funds those transaction fees would add up.

They will go into 4 separate General Investment Accounts and then be transferred over to S&S ISAs. Am I able to do this over 2 financial years or can you only choose one fund for the money to go into per financial year...
IE this April could I put 10k in VLS 60 and 10k in VLS 80 or can it only be one fund per year up,to 20k - hope this makes sense !!!!

Thanks

You would be able to do this with one GIA holding all 4 funds. You can have any number of funds per year.

bcfclee27

Prism wrote: »

The costs are only higher if your platform charges for dealing. Assuming you are just buying once and then selling one each year to place into an ISA the fees shouldn't be high. If you were adding a small amount each month to all 4 funds those transaction fees would add up.



You would be able to do this with one GIA holding all 4 funds. You can have any number of funds per year.

Great thanks, any recommendations of a GIA ?
HL charge 0.45 per annum - is this high ?

Audaxer

bcfclee27 wrote: »

Ok so current thoughts are now to split my 40k over the 4 funds that I've been deliberating over...

10k - HSBC Global Strategy Dynamic
10k - HSBC Global Strategy Balanced
10k - VLS 80
10k - VLS 60

This way I have all bases covered and the mix is roughly 70/30 Equities/Bonds.

That's okay, but to keep at a 70/30 mix, you will have to rebalance once or twice a year, probably having to sell some HSBC Dynamic and buying some Balanced and selling some VLS80 and buying some VLS60. If the markets have crashed you would need to do the opposite.

bcfclee27

Audaxer wrote: »

That's okay, but to keep at a 70/30 mix, you will have to rebalance once or twice a year, probably having to sell some HSBC Dynamic and buying some Balanced and selling some VLS80 and buying some VLS60. If the markets have crashed you would need to do the opposite.

Just as I thought I was starting to understand it !!!

I'm not too worried that the mix is bang on 70/30 but there or thereabouts - how much out of balance can it get them ?

I was hoping to just leave them in their allocated funds for 10-20 years......

fun4everyone

bcfclee27 wrote: »

Just as I thought I was starting to understand it !!!

I'm not too worried that the mix is bang on 70/30 but there or thereabouts - how much out of balance can it get them ?

I was hoping to just leave them in their allocated funds for 10-20 years......

Things can get quite out of line to what you originally allocate. I hold a portfolio of various funds and my Emerging Market allocation is currently a lot bigger % than I set it at when I last rebalanced, due to the good performance of that fund in 2017.

You don't have to rebalance, and if you just choose one global multi asset fund it is all done for you. However if you do hold more than one fund there is some compelling evidence that rebalancing once or twice a year can enhance returns. It would also keep your risk profile from getting out of line. The riskier funds should in theory become larger portions of your portfolio as time goes by without rebalancing.

Audaxer

bcfclee27 wrote: »

Just as I thought I was starting to understand it !!!

I'm not too worried that the mix is bang on 70/30 but there or thereabouts - how much out of balance can it get them ?

I was hoping to just leave them in their allocated funds for 10-20 years......

Take VLS80 and VLS60 for example. If markets were to keep rising then the VLS80 will grow more than the VLS60 so your hybrid VLS70 will gradually creep up and after a few years you may have a hybrid VLS75. In that case you would just work out how much of the VLS80 you would need to sell to top up the VLS60 to bring it back to a VLS70. You could leave them alone but it is increasing your risk tolerance, so you have a bigger fall come the next equity crash.

As the HSBC funds can alter their percentages of equities, it may or may not be that these funds change percentages of equities in falling markets, so may be more difficult to get exactly back to a hybrid HSBC70 than with VLS.

bcfclee27

fun4everyone wrote: »

Things can get quite out of line to what you originally allocate. I hold a portfolio of various funds and my Emerging Market allocation is currently a lot bigger % than I set it at when I last rebalanced, due to the good performance of that fund in 2017.

You don't have to rebalance, and if you just choose one global multi asset fund it is all done for you. However if you do hold more than one fund there is some compelling evidence that rebalancing once or twice a year can enhance returns. It would also keep your risk profile from getting out of line. The riskier funds should in theory become larger portions of your portfolio as time goes by without rebalancing.

This makes sense thank you.
Will I be charged for rebalancing ?