Wealth Preservation vs Multi Asset Funds

MichelleN

Are there any advantages (apart from active management) into paying the extra charges for wealth preservation IT's/funds - Capital Gearing, Personal Assets or Troy Trojan O?. As opposed to a low charge multi asset fund like VLS40 or the relatively new HSBC Global Strategy Conservative fund (about 35% equities)?

ColdIron

Wealth preservation UTs/ITs such as those you mention will actively seek to preserve the value of your capital. It is their objective. They can also invest in other asset classes such as commodities (and cash when appropriate). From the opening paragraph of PNL's annual report

Its investment policy is to protect and increase (in that order) the value of shareholders’ funds per share over the long term

The only objective of funds such as VLS40 is to maintain that 40/60 equity/bond split (wherever that will take you) in different market conditions

StellaN

I agree with everything ColdIron has said, but I am surprised to see on Trustnet how similar the performance figures are over the past 5 years. Although, we have only had minor corrections/dips during this period therefore it is not yet known how they will perform against each other in a major downturn/crash.

MPN

About a year ago I decided to invest in the HSBC GS Conservative fund to reduce the overall risk of my portfolio. It seems to have held up well compared to the wealth preservation IT's/funds but of course it's early days.

Aminatidi

I have around 55% of my investments split between Personal Assets, Ruffer, and Capital Gearing.

Long term the track record is there sufficient enough not to give sleepless nights.

As above the likes of Vanguard LifeStrategy are amazing but have a different objective.

bostonerimus

VLS40 and CGT have similar allocations to equities and bonds and have produced very similar returns over the past 5 years. If you think CGT will get you added return or protection through bad times because it is actively managed then go with it. I bet VLS40 will be just as good.

tin586

bostonerimus wrote: »

VLS40 and CGT have similar allocations to equities and bonds and have produced very similar returns over the past 5 years. If you think CGT will get you added return or protection through bad times because it is actively managed then go with it. I bet VLS40 will be just as good.

Completely agree. Total/absolute funds/ITs are total/absolute rubbish.

They prey on anxious investors’ fear to rake in their outrageous fees.

Prism

tin586 wrote: »

Completely agree. Total/absolute funds/ITs are total/absolute rubbish.

They prey on anxious investors’ fear to rake in their outrageous fees.

Outrageous fees? Most of the ones I have looked at are around 0.6% - 0.8%

bostonerimus

Prism wrote: »

Outrageous fees? Most of the ones I have looked at are around 0.6% - 0.8%

Outrageous is relative in this context. I find those fees outrageous, obviously those that own CGT do not.

tin586

Let’s take Personal Assets Trust (PAT), mentioned by the original poster.

The ongoing charge is 0.91% according to Morningstar and HL. I use those two sources, because I just cannot locate a fact sheet on PAT’s own website.

Then looking at their holdings, question is what exactly they are doing for their money?

If going for an IT, why would one not prefer Banker’s, say?

Or a tracker ETF or combination of (equity and bond) trackers?

Thrugelmir

tin586 wrote: »

Then looking at their holdings, question is what exactly they are doing for their money?

Wealth preservation. Opinions do differ. Without opinions there would be no markets to trade in.