Multi Asset Funds

pinkllama

If you’re interested in seeing how Lifestrategy funds performed during 2008, look at their U.S versions.

danm

Aminatidi wrote: »

the passives haven't been around long enough to know how they'll cope in a full on shitstorm IMO.

What do you mean by cope? I would fully expect them to reflect the shitstorm, or am I missing something?

Audaxer

A_T wrote: »

It would be interesting to know how, for example, Lifestrategy 20 would have performed during the credit crunch.

I would think it would have probably performed very similar to a portfolio containing a 20% global tracker and a 80% global bond fund.

Alexland

A_T wrote: »

Passive funds have been available in the UK but not low cost multi-asset (i.e. equity/bond) funds that the provider rebalances - like Lifestrategy, Consensus, HSB Global Strategy, etc. It would be interesting to know how, for example, Lifestrategy 20 would have performed during the credit crunch.

Multi asset funds are just an implementation of modern portfolio theory which goes back further to 1952.

Alex

A_T

Audaxer wrote: »

I would think it would have probably performed very similar to a portfolio containing a 20% global tracker and a 80% global bond fund.

So how would that have performed? Including the rebalancing?

Alexland

A_T wrote: »

So how would that have performed? Including the rebalancing?

A quick skim read of the below PDF suggests that a 20% stock and 80% bonds portfolio would have returned the US investor an average of 6.7% nominal or 3.6% real above inflation in the period 1926 to 2009. Vanguard have provided loads of data if you want want to dig through it all...

https://www.vanguard.co.uk/documents/adv/literature/portfolio-rebalancing.pdf

AnotherJoe

A_T wrote: »

Passive funds have been available in the UK but not low cost multi-asset (i.e. equity/bond) funds that the provider rebalances - like Lifestrategy, Consensus, HSB Global Strategy, etc. It would be interesting to know how, for example, Lifestrategy 20 would have performed during the credit crunch.

Why would that be interesting? Unless you knew before the cc happened in which case you wouldn't need such an investment anyway.

A_T

Alexland wrote: »

A quick skim read of the below PDF suggests that a 20% stock and 80% bonds portfolio would have returned the US investor an average of 6.7% nominal or 3.6% real above inflation in the period 1926 to 2009. Vanguard have provided loads of data if you want want to dig through it all...

https://www.vanguard.co.uk/documents/adv/literature/portfolio-rebalancing.pdf

US data so a rough guide only. Thanks anyway.

A_T

AnotherJoe wrote: »

Why would that be interesting? Unless you knew before the cc happened in which case you wouldn't need such an investment anyway.

Believe it or not some people position their portfolios very defensively in case of a stock market crash.

Aminatidi

So if you take VSCGX which is the US equivalent of LifeStrategy 40 (with a slightly different composition to the current UK LifeStrategy products) you can see total returns here.

https://finance.yahoo.com/quote/VSCGX/performance/

It shed around 20% in 2008.

Of course, past performance doesn't equal future performance, but knowing how it performed and knowing how some of the cautious/flexible IT options performed may help someone form a view whether they think they're best served with a passive or active option.

I do wonder how much of an impact algorithmic trading may have on any downturn. You read plenty that suggests that once algorithms are driving things any kind of sell-off may be quick and brutal.