My index fund or my actively managed fund

bowlhead99

d712 wrote: »

I've repeated my original question a couple of times as it hasn't been answered yet.

The question was of the two, what would you do?

Stick with Jupiter India or go with S&P 500?

Thanks

You complain that nobody is answering your question about making the stark choice between a US index or an India active fund , two funds which will have dramatically different results over time. Yet when you are asked for further information, you haven't said how your portfolio is currently allocated among the India find and S&P fund, nor what proportion of your portfolio is made up of all those other funds you mentioned (and in what ratios), nor what your overall objective or strategy is.

So, it's downright impossible for us to advise you on how to adjust your portfolio, when we don't know what you currently hold let alone what you are aiming for. Let me guess, you have some arbitrary goal of "make as much money as possible using the funds I've heard of which people say might be good"?

Personally, I would transfer all the money out of the S&P 500 fund and put it into the Indian fund. How can I say this when I don't even know the amounts involved or what your objectives are? Well, that's not my fault because you have had ample opportunity to tell us and have chosen not to, instead complaining that we're not answering your question.

Still, the logic for such a move would be:

By having all those other funds you mention above (lifestrategy, developed world ex UK, Global 100) you already have a massive allocation to S&P500 companies, and the global smallcap fund is also over 50% allocated to US companies.

So, there can't be any need to have done as you have done and "transferred quite a lot of my investments onto an S&P500 index fund", when half your money in all those other funds is already invested in North America. Let alone add even more to the S&P at high prices by taking money out of an India fund at relatively low prices. If you are juggling around with the contents of your portfolio it would make sense to rebalance away from the S&P (which has been going up strongly in recent years) in favour of the area(s) that have just gone down (or relatively less up).

You mention that Buffett recommends putting all your money into the S&P index. He doesn't recommend that to the average UK investor. He also doesn't say that a passive US fund will beat an active India fund for a US or UK investor. He does however say the US is the greatest place on earth to be an investor, but that's not surprising when he is a good ol' boy from Omaha, a patriotic octogenarian billionaire who made his money in the US and runs an insurance and investment group which is US listed and whose share price will be damaged if he were to say anything other than what's expected of him which is that the US has great prospects.

Also I'm not sure how you can say I have lucked out when you don't know where I stand with my investments overall.

The assertion was that you had misunderstood the 'advice', piled into the S&P, and got lucky.

As the S&P happens to have been one of the best places to be invested for the last nine years (especially over the last year or two from the perspective of a UK investor with some currency gains), it seems likely that you will have had good results with your US-heavy approach, despite not having a particularly cohesive investment strategy.

At least, I'm assuming there isn't a cohesive investment strategy otherwise you would have told us what it was, or at least why you hold all those other overlapping funds, and why you bought the India fund, and why you no longer think you want to own it even though it's now cheaper to buy than when you first decided it was a fair price to buy in at.

Of course, you don't have to tell us your strategy and objectives that caused you to buy all these funds but if you're looking for advice on whether to hold an index in the largest developed market country in the world (to which you already have exposure via several other funds, vs an active fund in a smaller emerging economy, it would perhaps help.

FWIW I generally prefer active funds for developing markets where the index would allocate my capital to a load of companies with poor governance, nepotism and corruption risk etc etc just on the basis of their respective size. There can be smarter ways to invest where markets are not so perfect and efficient.

dunstonh

When you build a portfolio you place x% in Europe, y% in US, z% in UK etc (to around 10 sectors typically).

You are not building a portfolio. You are taking a punt based on bad research and poor understanding. You are then asking us to help you randomise your punt even more. Yet most of the regular posters here would not be making the same mistakes you are. Asking us to compound your mistakes is not going to see us oblige.

BLB53

The question was of the two, what would you do?

Stick with Jupiter India or go with S&P 500?

For me the answer would be neither...sell both and reinvest in your VLS index for a decent long term outcome.

IanManc

d712 wrote: »

Actually the actively managed funds were never publicly named so neither of us know what they consisted of.

I've repeated my original question a couple of times as it hasn't been answered yet.

The question was of the two, what would you do?

Stick with Jupiter India or go with S&P 500?

Thanks

The context in which Buffett was speaking is relevant. He was explaining that the S&P500 is so completely researched and analysed that active funds that invest in it won't beat it, so you might as well use an S&P500 index tracker rather than an active fund which picks stocks from the S&P.

You appear not to know which investments he was talking about, but the rest of us do.

As for your question, my answer is neither.

System

dunstonh wrote: »

So, following his advice is risky.

Actually it isn't if you follow ALL of his advice, one of the bits of that advice is that investing is for the long term and the less time you're in the market the higher the chance of making a loss. There's a chart somewhere which shows the chances of loss vs years in the market.

BLB53

Do remember that the last decase has seen the S&P500 outperform most markets. The decade previous to that, it underperformed most markets.

...and the decade previous to that to Aug 2000 it outperformed with an average of 20% p.a. so whether it is risky or not will depend upon your timeframe...the longer the better.

dunstonh

BLB53 wrote: »

...and the decade previous to that to Aug 2000 it outperformed with an average of 20% p.a. so whether it is risky or not will depend upon your timeframe...the longer the better.

Single sector investing is introducing unnecessary risks.

Invest 100% in Japan over the decades and look at what happens.

If you look at the performance of each sector over the years you will see none remain at that top. And often the ones near the top one year will be near the bottom the next. Some will have multi-years of outperformance whilst some will have multi-years of underperformance.

Actually it isn't if you follow ALL of his advice, one of the bits of that advice is that investing is for the long term and the less time you're in the market the higher the chance of making a loss. There's a chart somewhere which shows the chances of loss vs years in the market.

His advice is usually positioned towards US investors subject to US tax law. (where investments are taxed internally unlike the UK for example). US investors are also typically very inward looking whereas European investors are more global. US models tend to focus on how you split small, medium and large cap. European models focus on region. Currency fluctuations have a lot to do with that. Not something many worry about in the US.

badger09

d712 wrote: »

Actually the actively managed funds were never publicly named so neither of us know what they consisted of.

I've repeated my original question a couple of times as it hasn't been answered yet.

The question was of the two, what would you do?

Stick with Jupiter India or go with S&P 500?

Thanks

You haven't said why you have to choose between these 2 options, so my advice would be to use the only scientific method available to help you make your decision.

https://justflipacoin.com/

d712

Looks like bowlhead is the only person who has answered my question.

Thanks bowlhead.

As for poor understanding, bad research etc. I know that the S&P500 has produced average annual returns of 9-10% for the last 90 years.

I also know that Buffett is the most successful investor in the world and this is his recommendation.

Combining those two facts makes for a convincing argument.

We can do the exact same research and draw totally different conclusions from the same set of information so going with a world renowned expert is hardly a shot in the dark.

As for my question, think of it this way guys.

Imagine these are the only two funds in the world, which would you choose?

That way you don't have to go into all this other spiel and just give a simple answer.

dunstonh

As for poor understanding, bad research etc. I know that the S&P500 has produced average annual returns of 9-10% for the last 90 years.

Again, that shows your poor understanding. For the bulk of that period, the US was an emerging market.

I also know that Buffett is the most successful investor in the world and this is his recommendation.

No it is not his recommendation.

Imagine these are the only two funds in the world, which would you choose?

its not a decision you have to make and I'm not falling for your attempt to steer an answer out of us for something most of us here would not do.

That way you don't have to go into all this other spiel and just give a simple answer.

There is no simple answer to comparing an emerging market fund covering one country vs a developed market fund covering another.

You keep saying you understand but everything you type shows you do not. I suspect you are not really taking in what is being said to you. So, just flip a coin as badger has suggested and then do the opposite because you will probably disagree with the coin.