Multi-Asset Funds - Differences?

Audaxer

dunstonh wrote: »

If you are not going single sector then upto £85k (the new FSCS limit coming) in each would be fine. Variations of a theme. Under FSCS limits, no knowing which will be best...... why not

My thinking was having a multi asset fund portfolio split between two funds, say VLS60 and HSBC Global Strategy Balanced, would also give added diversification. As you say, in one period of time one will perform better and in another period the other will perform better. I assume that would help reduce the volatility a bit rather than having a large investment all in the one multi asset fund?

dunstonh

Audaxer wrote: »

My thinking was having a multi asset fund portfolio split between two funds, say VLS60 and HSBC Global Strategy Balanced, would also give added diversification. As you say, in one period of time one will perform better and in another period the other will perform better. I assume that would help reduce the volatility a bit rather than having a large investment all in the one multi asset fund?

its a marginal diversification in volatility. Very little in volatility. The main gain is hedging your bets.

rathernot

So not to put words in your mouth but it sounds like essentially between the ones I've mentioned, I may notice a difference between going with say LS40 v LS80 or MyFolio III v MyFolio V, but the differences between comparing say LS40 to MyFolio III should be more subtle i.e. I won't wake up one morning in the poorhouse thinking "If only I'd gone with LifeStrategy over Standard Life or Architas"?

A_T

Audaxer wrote: »

My thinking was having a multi asset fund portfolio split between two funds, say VLS60 and HSBC Global Strategy Balanced, would also give added diversification. As you say, in one period of time one will perform better and in another period the other will perform better. I assume that would help reduce the volatility a bit rather than having a large investment all in the one multi asset fund?

For me the best way to diversify if you want to hold 2 multi assets is to go with VLS and Fidelity Multi Asset Allocator. The Fidelity funds use unhedged overseas bonds for their fixed income element whereas VLS uses GBP bonds and sterling hedged overseas bonds.

rathernot

Leaning towards HSBC Global Strategy Balanced as it appears to have a slightly more global spread than Vanguard which, as people have pointed out, has a bit of a UK bias.

I suspect it's small enough margins to make little difference as Dunstonh points out so I may just do 50/50 between both and stop worrying about 0.1%