Can funds actually go bust?

badger09

@ RobStaffs

Already mentioned - see ColdIron's post 61

eagleeye

The active funds generally soft close or they change the class and relaunch.This way people are not able to see their past performance.The Indian market has lost lot of amount recently and you can check peers performance on etfdb(us listed).

http://etfdb.com/themes/ishares-india-etfs/#complete-list__returns&sort_name=fiftytwo_week_return&sort_order=desc&page=1

The SMIN (US listed) Indian small cap etf has lost about 32% this years as per morningstar UK.On the other hand, INDY (US listed) passive etf has lost only about 12.5%.

The global trackers are more appropriate and cost effective for a common investor .Please visit monevator to read article by Lars .

http://monevator.com/why-a-total-world-equity-index-tracker-is-the-only-index-fund-you-need/

poppy10_2

dunstonh wrote: »

China has had a number of 55-70% drops.

When was the last 70% drop in the Chinese market, dunston?

dunstonh

poppy10 wrote: »

When was the last 70% drop in the Chinese market, dunston?

I'm not checking now as its Sunday night but around 97 it did. There was a near 60% drop in the 80s as well and lots of 40%.

Aretnap

dunstonh wrote: »

I'm not checking now as its Sunday night but around 97 it did. There was a near 60% drop in the 80s as well and lots of 40%.

Going back a bit but wasn't there also the little matter of a 100% loss in 1949? That, and Russia in 1917, must represent the ultimate in stock market crashes.

seacaitch

poppy10 wrote: »

When was the last 70% drop in the Chinese market, dunston?

From Oct 2007 to Oct 2008, the Shanghai Composite Index (China's primary stock market index) dropped by ~73% peak to trough.

& it also fell ~49% between June 2015 and Jan 2016.

badger09

dunstonh wrote: »

I'm not checking now as its Sunday night but around 97 it did. There was a near 60% drop in the 80s as well and lots of 40%.

:eek:

Please direct me to your Complaints process.

Random strangers on the internet expect a 24/7 response service from you:p

Malthusian

aroominyork wrote: »

And now, back to the records.

This thread, and the other one this week about Jupiter India, opened my eyes to something I had not quite understood about the benefits of passive investing. I’ve been DIYing since last summer with an active portfolio not too different in regions/sectors from VLS (maybe slight higher risk and more smaller companies) and have outperformed VLS by a couple of percent.

I won't labour the pedantry about how this is single-fund/multi-asset vs multi-fund/single-sector portfolios rather than passive v active. It is a good observation which illustrates two important points:

1) There is no such thing as a 100% passive investment. Investing in a single fund for your entire portfolio, e.g. Vanguard Multistrategy, is still a management decision. But the more management decisions you make, the more you can regret later.

2) Show someone a statement which shows that their 60% in equities has gone up 10%, their 35% bonds have gone up 5% and their 5% commodities have fallen 10% and they will say "why did you / I invest in this stupid commodity fund". Show someone a statement which shows that their multi-asset fund consisting of the exact same assets has gone up 7% and they will be happy with their 7% return.

Humans are hard-wired to focus on the negative because when your vision consists of some verdant trees, a pool of cool drinking water, some pretty flowers and a tiger, instant focus on the tiger to the exclusion of everything else gives you maximum chance of survival. That is not however how investment works.

This is why single-fund/multi-asset portfolios should be used by novice investors. DIY investment in single-sector funds is not suitable for someone who is going to look at short-term performance in isolation. Especially not extra-high-risk ones like Jupiter India.

User6565

I’ve just been dabbling with Jupiter India- only £25 a month over the past year or so but I’m down 27%. It’s been a good lesson for me in terms of risk tolerance and approach. At this level I’m quite happy to be riding out losses but I think I would have been panicking if I’d have had thousands invested. I don’t think I would have sold at this level of loss even with a higher sum invested but i would have been worried. It’s been quite interesting to see my emerging market fund go down but by no where near as much as the single sector. My global funds are still doing fine despite dropping. This has been the most valuable lesson for me even if it ends up costing me money to learn it.

I’m glad I’ve had the chance to learn with small sums as I’m due an inheritance and will only be looking at global funds rather than specific sectors and I wouldn’t be looking at anything quite as volatile.