CAT + HSBC fund cost question

gudda96

Hi Guys

After receiving lots of good advice here, I have ended up with
CGT
HSBC Global Balanced Portfolio C
V60/40

I have CGT + HSBC with AJB, so my question is, as HSBC fund cost is .7% and HSBC is .18%, is it worth just having HSBC with their lower costs.

One of the members did say, it would be a decent move just having HSBC as it ticks all the boxes from a safety view.

ALSO...should I receive emails to tell me of replies.

Linton

I think there is a typo in your OP as HSBC seems to be mentioned too often.



Over the past 5 years HSBC has marginally outperformed VLS60 3 times and VLS60 has won 2 times. So the difference is negligible and the fund charges irrelevent. Both funds operate in the same sector. Both funds are comprised of a set of trackers. So I dont see much point in having both. Rather than considering charges I would base my decision on the sector/geography allocation of the funds and their investment strategy.


CGT is a very different fund with different objectives. It is focussed on Wealth Preservation and generally has lower returns than the other 2 funds. However you would expect it to perform very much better in a serious downturn. It is not an alternative to VLS60 or HSBC Global Balanced Portfolio but arguably more an alternative to their bond component.

bowlhead99

gudda96 wrote: »

I have CGT + HSBC with AJB, so my question is, as HSBC fund cost is .7% and HSBC is .18%, is it worth just having HSBC with their lower costs.

Perhaps you mean Capital Gearing Trust is 0.7% and HSBC is 0.18%?

You have already spent the entire month of September going round the houses several times over before deciding what to hold, changing your preferred holdings several times on your 70-post thread and then telling us what you were eventually going to do, having said that obviously you can't do what everyone suggests to you, and you want to have some independence of thought anyway.

Then since your last post a couple of weeks ago when you were going to hold the above three funds plus Lindsell Train Global, you have now decided to drop LT for just these three, and now you are considering dropping Capital Gearing again.

Since the first post on your other thread you have de-risked significantly, which is probably good for your overall objectives. Your original equities-heavy portfolio was probably too high risk/volatile for your needs (preserving capital for yourself and the kids and maybe making enough extra money for some coffees etc). From what you have told us on that other thread, what you have is probably fine, or at least a lot more suitable than when it started.

On that thread a month ago you had not included Capital Gearing in your shortlist until someone suggested it as being known for a capital preservation strategy. You then said, "Yes, I have been reading up on CGT as its talked about on Citywire forum a lot, some said costs were high though", and it was pointed out that returns net of costs had been fine historically - costs are only one party of total performance- and the were another 50 odd posts after that.

If you want to go back to square one and reconsider whether you should dump CGT again in favour of buying more HSBC Global Strategy Balanced, then yes, go ahead and consider it, but nothing has changed in the last couple of weeks or month to make it suddenly inappropriate.

As I understand it, you don't have a specific target, just an aim to make some moderate medium to long term gains and hopefully not lose too much over the period. You could do that with any of the three funds you mention here, and you've chosen to use all three. That's fine, but yes you could also probably do it with two, or one.

The three funds you mention have different approaches and will give you a different result (with CGT likely aiming to be the most conservative), so you may prefer to hedge your bets and buy all of them; the blend will probably be fine over the longer term, given the general vagueness of the overall objectives. In your shoes I would not get too hung up on the fact that one of them uses a more active (and costly) approach to achieve its decent net results. You are not putting all your money into it and so the blended cost of your investing is fine. Yes you could 'save' a small fraction of a percent per year of fees, by dropping the CGT investment altogether, but lower fees is not guaranteed to leave you with more money in your pocket because you don't know if you will be changing the top line performance for better or worse by doing it. It depends what happens in the investment markets over the period.

ALSO...should I receive emails to tell me of replies.

You can select an option to 'subscribe' to a thread to get instant emails on every reply (which would be tedious if the thread gets long) or daily / weekly summaries.

As an alternative you can always find your old threads by clicking on your own name and following the links to 'threads started by' or 'posts by', your name.

gudda96

Bowlhead99

I thank you for a very detailed reply, albeit a slight reprimind for repeating myself, and for being undecided on things, but I plead guilty that.

I read once on a forum that "there is no such thing as a silly question" so I hope that saying applies to this forum also.

I hear all you say and IF I wanted to offer an excuse for any indecisions, it would be to say, that when I started a few years ago, I only dealt in equities, won some lost some. Then I starting changing to funds/trusts and reading this and MSE investing forum. The conclusion is/was, if I can end up have one fund like HSBC for example which is safe, steady, I would stop doing a daily check and do more fishing.

I apologise for typo.