Investing during Brexit

sixpence.

Also I just brought this up on the HL webpage. They charge a managers fees but what is to potentially stop me from taking the allocation constructing the same sort of thing for myself?

http://www.hl.co.uk/funds/hl-funds/multi-manager-funds/hl-multi-manager-high-income

Audaxer

sixpence. wrote: »

Also I just brought this up on the HL webpage. They charge a managers fees but what is to potentially stop me from taking the allocation constructing the same sort of thing for myself?

http://www.hl.co.uk/funds/hl-funds/multi-manager-funds/hl-multi-manager-high-income

I'm not sure how easy that is to do as I think you can only see the top 10 holdings, and they don't add up to 100% so there must be other funds in there that I can't see. I would think there are probably more funds than you need anyway if constructing your own portfolio.

Is there diverse, lost cost, single fund (such as the VLS) which I can stick a five figure number into and gain income from? 3-4% yield.

I already mentioned Artemis Monthly Distribution I fund. Other multi active possible funds to consider could be Kames Diversified Monthly Income Fund GBP B Inc and/or the M&G Episode Income Fund Sterling I Inc. The only multi asset fund of passives that I know of that focus on income and have a yield around 3% are the L&G Multi Index Income range. I have highlighted the word income as it is easy to confuse the L&G Multi Index range that has a lower yield and is more to do with growth rather than income.

Thrugelmir

sixpence. wrote: »

2. Are there any good books/resources for researching funds for income?

Todays star maybe tomorrows dog. However good a fund manager is. There's no certainty that the companies invested in will perform. Though personally I'd look for those that mandate investing in cash generative companies with strong balance sheets. Not the most exciting but those that will deliver whatever the economic circumstances.

Filo25

With regards to the original question on Brexit, the market assessment of the current level of Brexit risk is pretty much baked into the prices of UK assets already, so personally I wouldn't let it drive too much behaviour myself, I certainly hold a fair bit of UK Mid and Small Cap (all active), no help on Income funds though as most of mine are aiming for growth

Hussel

With regards to the original question on Brexit, the market assessment of the current level of Brexit risk is pretty much baked into the prices of UK assets already, so personally I wouldn't let it drive too much behaviour myself, I certainly hold a fair bit of UK Mid and Small Cap (all active), no help on Income funds though as most of mine are aiming for growth

Depends what you mean by baked in. Markets will “price in” future developments only to the extent that they think they’re likely. In the case of Brexit, the differences between the outcomes in terms of economic consequences are huge. Let’s say we decide to stay in the single market (seems very unlikely at the moment) then there’s a chance that U.K. stocks can recover from their recent underperformance as markets will be happy about the long-term stability. On the other hand, there’s also a not insignificant chance that we’ll leave without a deal which could lead to a further large depreciation in the pound and a tanking in U.K. small and mid caps, particularly those with a local focus. The market thinks the latter’s unlikely but that’s in the hands of politicians, some of whom seem more than willing to take an economic hit.

Personally I think the market’s underestimating the chances of us going through with a hard Brexit so I wouldn’t be touching U.K. stocks for a few years. Why invest in 6% of the world stock market when other countries haven’t got this hanging over their head.

Filo25

Hussel wrote: »

Depends what you mean by baked in. Markets will “price in” future developments only to the extent that they think they’re likely. In the case of Brexit, the differences between the outcomes in terms of economic consequences are huge. Let’s say we decide to stay in the single market (seems very unlikely at the moment) then there’s a chance that U.K. stocks can recover from their recent underperformance as markets will be happy about the long-term stability. On the other hand, there’s also a not insignificant chance that we’ll leave without a deal which could lead to a further large depreciation in the pound and a tanking in U.K. small and mid caps, particularly those with a local focus. The market thinks the latter’s unlikely but that’s in the hands of politicians, some of whom seem more than willing to take an economic hit.

Personally I think the market’s underestimating the chances of us going through with a hard Brexit so I wouldn’t be touching U.K. stocks for a few years. Why invest in 6% of the world stock market when other countries haven’t got this hanging over their head.

I won't argue that an assessment of risk is built in rather than an assumption that we will have a catastrophic worst case scenario, but unless anyone has strong knowledge otherwise to think a good or bad scenario is much more likely than the market expects I'm not sure it is something worth avoiding UK equities entirely over

You will find serious risk wherever you go in the world economy (EU - political risk, US - valuations and possible inflation, EM- the usual EM volatility and Chinese debt worries, etc.). For me it wouldn't stop me investing in the UK anyway, if noting else I'm getting equities at more compelling valuations than in many markets, to compensate for the risk. Obviously diversified in other markets as well, but everyone has to form their own opinion on their risk tolerance.

Brexit is a bit of a mess alright, but are there the votes in Parliament to push through the cliffedge? Time will tell

economic

Im now thinking of selling out of my parents managed funds and into more income orientated funds/stocks/investments. This is all in their ISAs.

The income parts of their portfolios generate a dividend income of around 4k pa. Im looking to sell out of 60k of funds into income investments, is 3.5% possible with diversified risk? This brings income to 6k pa which would nicely supplement their existing income through annuities and later state pension.

Hussel

There are risks wherever you invest, of course. But I believe leaving the EU without any deal is on another level to the others you mention, particularly over the medium term. And no “sunny uplands” rhetoric from politicians with Brexit blinkers on is going to change my mind on that.

I’m not particularly saying I wouldn’t have any exposure to U.K. equities at all (eg I’d buy a world index), I just wouldn’t have a separate overweight U.K. allocation, something which is quite common amongst U.K. investors who like the idea of overweighting their home market. I just don’t see the U.K. market outperforming others over the next few years and I think there are huge risks to smaller companies with exposure to the local economy. For the pound, things could be awful if it all goes wrong.

Will they vote through a bad deal? Probably not, but what then? It’s hardly going to inspire confidence for internal or external investment. Sorry if I sound pessimistic, I just have strong suspicions this is not going to end well - it’s either going to break the country or the Tory party and at the moment I’m hoping the latter and we can get back to sensible economically sound centrist politics. You can’t run a developed country in the long term with a choice only between the European Research Group or Jeremy Corbyn.

JohnRo

Mr Mogg and the new Victorians will fix everything. Britannia rules the waves.

All we need is to reinstate the slave trade, high seas piracy, control of a few other countries land and resources alongside thousands of empire plantations dotted around the globe, that'll put the Great back into Britain.

It'll be fine!!!8482;

Filo25

Hussel wrote: »

There are risks wherever you invest, of course. But I believe leaving the EU without any deal is on another level to the others you mention, particularly over the medium term. And no !!!8220;sunny uplands!!!8221; rhetoric from politicians with Brexit blinkers on is going to change my mind on that.

I!!!8217;m not particularly saying I wouldn!!!8217;t have any exposure to U.K. equities at all (eg I!!!8217;d buy a world index), I just wouldn!!!8217;t have a separate overweight U.K. allocation, something which is quite common amongst U.K. investors who like the idea of overweighting their home market. I just don!!!8217;t see the U.K. market outperforming others over the next few years and I think there are huge risks to smaller companies with exposure to the local economy. For the pound, things could be awful if it all goes wrong.

Will they vote through a bad deal? Probably not, but what then? It!!!8217;s hardly going to inspire confidence for internal or external investment. Sorry if I sound pessimistic, I just have strong suspicions this is not going to end well - it!!!8217;s either going to break the country or the Tory party and at the moment I!!!8217;m hoping the latter and we can get back to sensible economically sound centrist politics. You can!!!8217;t run a developed country in the long term with a choice only between the European Research Group or Jeremy Corbyn.

I don't disagree with much of what you have said (although I think after getting through the Brexit madness an ERG takeover of the UK would probably be pretty good for equities, with some rather "business friendly" policies).

My gut for now remains that Britain is a firmly divided country the polls have barely moved for months now, given I don't much care for the direction either major party is going in, I am all in favour of finely balanced parliaments with weak governments unable to push through anything controversial.

It also appears Labour may be about to come out in favour of Customs Union membership , if they do I don't think the government has the votes in Parliament to avoid eventually following that path.