Opinions on holding CFP SDL BUFFETTOLOGY ina falling market?

TUVOK

I have been following this fund and its manager for some time and have been impressed with the performance albeit in a bull market.
The funds life span is fairly short and has yet to encounter any severe market falls, also the fund costs are quite high.
Opinions on the fund would be welcomed

Tcquins

We use it in our portfolios at work and have met the fund manager Keith Ashworth-Lord who has a very refreshing and frank speaking style. Can’t argue with the performance and risk-adjusted return thus far.

He’s fairly up front that he’s finding valuations in areas stretched. That being said the fund has about 10% cash due to inflows being so high which helps in a falling market.

Careful chasing the best performing funds over 1 year. You’ll come undone if that’s where you end up picking your whole portfolio.

Prism

I would hold any fund in a falling market that I would hold in a rising market. A good fund is a good fund. However, I do think Buffettology would drop along with everything else in a recession. Its cyclical and not especially defensive. Small and micro cap companies have significant risks during these times too

rathernot

I hold Buffettology and there's a bit of a misconception (shared by myself) that it's a small/micro cap fund.

Keith addresses this in the October factsheet http://www.castlefield.com/media/2374/cfp-sdl-uk-buffettology-october-2018.pdf

He invests in good businesses, I struggle to see many viable alternatives assuming people who hold Buffettology probably also hold the likes of Fundsmith and Lindsell Train too.

kidmugsy

Mr Buffett gets to pull strings in Washington.

I suspect that Mr Ashworth-Lord doesn't.

If you are worried about a stock market crash the classical advice is to switch to bonds. That certainly worked for the crash of 2000. It's not clear to me that it will work as well now. There's alway the Harry Browne Permanent Portfolio to consider, but it too depends partly on the merits of bonds.

Malthusian

kidmugsy wrote: »

Mr Buffett gets to pull strings in Washington.

I like this point, but there are no strings you can pull in Washington that will prevent market crashes.

There's always the Harry Browne Permanent Portfolio to consider, but it too depends partly on the merits of bonds.

The HBPP is invested 50% in zero-expected-return assets (cash and gold) so switching into it in the expectation of a crash goes beyond repositioning and into market timing.

aroominyork

rathernot wrote: »

I hold Buffettology and there's a bit of a misconception (shared by myself) that it's a small/micro cap fund.

Keith addresses this in the October factsheet http://www.castlefield.com/media/2374/cfp-sdl-uk-buffettology-october-2018.pdf

He invests in good businesses, I struggle to see many viable alternatives assuming people who hold Buffettology probably also hold the likes of Fundsmith and Lindsell Train too.

The factsheet says: “The breakdown of market capitalisation for the 30 investments is currently Mega (>£10bn) 13%, Large (£1-10bn) 30%, Mid (£500m-1bn) 17%, Small (£100-500m) 18% and Micro (<£100m) 6% - the missing 16% being the cash.”

There have been several threads recently about the upper limit of SMEs but it is generally seen as higher than £1bn. The new Smithson IT will invest in SMEs between £500m to £15bn and Smithson’s factsheet says the c.5,000 companies in the MSCI World SMID Index have an average market cap of £1.9bn. If I wanted to add Buffettology to my UK holdings and maintain a balanced market cap, I would be selling much more of my Liontrust UK Smaller Companies than Lindsell Train UK Equity.