Multi Asset Funds

stephenadarglas

Hi guys

I'm close to moving some of my portfolio into these types of funds to start taking an income from them. I'd appreciate a little guidance on the types of funds available.

barnstar2077

Vanguard Lifestrategy Funds Explained (0.22% annual cost):
https://www.youtube.com/watch?v=p-O3d6mel28

Blackrock Mymap (0.17%) v Vanguard Lifestrategy:
https://www.youtube.com/watch?v=1QVsGps18D4

Vanguard Target Retirement Funds (0.24%):
https://www.youtube.com/watch?v=Sr-IFxRGT88

There is also the HSBC FTSE ALL WORLD INDEX CLASS C - ACCUMULATION (GBP) at 0.19% cost a year:
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-all-world-index-class-c-accumulation/fund-analysis

and the FIDELITY ALLOCATOR WORLD CLASS Y - ACCUMULATION (GBP) at 0.25% cost a year:
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fidelity-allocator-world-accumulation/fund-analysis

I personally use the VLS 100 fund combined with some bond funds, medium to short term, so I can control the ratio myself.

tacpot12

Have you considered Investment Trusts as an alternative to MA Funds?

My retirement portfolio is mainly build around ITs. One advantage of ITs is that they can and do hold back income in order to create a less volatile income stream. My view is that they will tend to do this when they see a dip in dividends coming, so you are benefiting from their insight into the companies in the portfolio. Funds can't to this, they have to pay out all the dividends they receive, so you could find yourself with lower income without any notice. This can be ameliorated by holding your own cash reserves, which I also do, but I would rather have the benefit of the investment professionals helping to smooth out the income stream. There are others who will prefer to have the cash in hand; a bird in the hand being worth more than a bird in the bush.

Albermarle

Have you considered Investment Trusts as an alternative to MA Funds?

Typically IT's will have annual % charges approx. three times those of MA funds , as by their nature they are actively managed .
However some platforms put a cap on their service charge for IT's which can mitigate some/most of the extra cost .

IanManc

Albermarle wrote: »

Typically IT's will have annual % charges approx. three times those of MA funds , as by their nature they are actively managed .
However some platforms put a cap on their service charge for IT's which can mitigate some/most of the extra cost .

You also have to pay 0.5% Stamp Duty on purchasing Investment Trusts, which you don't have to pay when buying funds.

That could be a significant consideration when you are moving the value of a whole portfolio.

xylophone

There is also the HSBC FTSE ALL WORLD INDEX CLASS C - ACCUMULATION (GBP) at 0.19% cost a year:
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-all-world-index-class-c-accumulation/fund-analysis

and the FIDELITY ALLOCATOR WORLD CLASS Y - ACCUMULATION (GBP) at 0.25% cost a year:
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fidelity-allocator-world-accumulation/fund-analysis

The OP said

I'm close to moving some of my portfolio into these types of funds to start taking an income from them

Presumably he'd want the income units of the above?

Alexland

Albermarle wrote: »

However some platforms put a cap on their service charge for IT's which can mitigate some/most of the extra cost .

Even when you have enough for capped platform fees on traded assets you can use low cost ETFs so the IT higher active fees remain a drag.

Alex

Audaxer

tacpot12 wrote: »

One advantage of ITs is that they can and do hold back income in order to create a less volatile income stream. My view is that they will tend to do this when they see a dip in dividends coming, so you are benefiting from their insight into the companies in the portfolio. Funds can't to this, they have to pay out all the dividends they receive, so you could find yourself with lower income without any notice.

I do like the fact that some ITs have a long history of increasing dividends. It seems harder to find data of a long history of dividends paid from funds to see whether the total level of dividends paid from funds over the long term is similar to ITs. City of London IT has a yield over 4% and has a history of dividends increasing of over 50 years. I have some UK equity income funds also with yields of over 4%. I would like to think if these fund dividends were cut in an equity crash, higher dividends would be paid in good times to make up for that, but I've not yet seen any data to show that is the case?

Aminatidi

I use ITs for my multi-asset funds simply because for the moment I'm more comfortable with the track record the more cautious ITs have, the passives haven't been around long enough to know how they'll cope in a full on shitstorm IMO.

Ruffer Investment Company
Capital Gearing Trust
Seneca Income & Growth Trust
Personal Assets Trust

May all be worth looking into.

There are OEIC versions available.

As mentioned above, platform charges can make a significant difference.

Alexland

Aminatidi wrote: »

passives haven't been around long enough to know how they'll cope...

Passive investment strategies have been available to retail investors since Bogle launched his first US tracker in 1976. Although some ITs predate this they are likely to have had changes in their investment strategy along the way.

Alex

SonOf

stephenadarglas wrote: »

Hi guys

I'm close to moving some of my portfolio into these types of funds to start taking an income from them. I'd appreciate a little guidance on the types of funds available.

What method of income draw are you proposing to use?
e.g. yield, phased portfolio risk, capital growth sales etc

I'd appreciate a little guidance on the types of funds available.

Without knowing your strategy, we cannot possibly suggest funds.