Could anyone comment on taking a CETV who has done it??

bigadaj

Deleted_User wrote: »

In the US companies which sell the funds love it when you buy it from them. They compete on price big time. Charge a heck of a lot less than in the UK (for the most part).

In Canada we can buy US ETFs but not their mutual funds. That, and having Vanguard ETFs here for some time has pushed ETF prices much lower, even for the active ones. We can’t buy US mutual funds (nor does Vanguard operate in the Canadian MF space) and the local ones can be even more expensive than in Britain. These we can buy at a “discount” from discount brokers. Basically the discount broker gives you most of his commission while the banks don’t but the fund advertises the higher cost.

Buying cars from the manufacturer is illegal - in most places.

U.K. Fund houses also love it when you buy direct from them but it's often cheaper through a discount broker or platform, vanguard being an exception.

You'd never buy funds through a bank in the uk if you had some knowledge as they are typically very pricey, though there are exceptions, Halifax share dealing or its white label alternatives are as cheap as most.

Not sure what you mean regarding cars, in many places car manufacturers are vertically integrated, so buying through a discount broker is often the way to go if you want to buy new.

jamesd

bostonerimus wrote: »

Why not just cut out all the rebates and give a simple clear fee?

Much of the UK market has switched to OEICs. Unlike a unit trust those quote only a single price at which both buy and sell trades happen and there's no ordinary times provision for a load at all. In non-normal times a dilution levy could be imposed to protect other investors but the fund house doesn't get that money.

jamesd

Deleted_User wrote: »

Should make for one hell of a ride, unless >80% is in the last fund

Here's the reordered split with 0-12, 12-24 month and 3 year performance after the most recent pricing:

% held 0-12   12-24 3 year cost   name
 9.9% +22.0% - 9.9% +13.4% 1.446% SL Fidelity Asia
10.2% +30.3% -12.7% +14.5% 1.081% SL JP Morgan Emerging Markets
13.6% +30.1% -23.2% + 8.4% 1.106% SL Merian UK Mid Cap
17.7% +44.0% -10.3% +18.7% 0.746% SL SLI UK Smaller Companies
19.4% +21.8% - 8.2% +12.0% 1.066% SL SLI Global Smaller Companies
29.3% +28.6% -12.3% + 9.8% 0.278% SL Vanguard FTSE Developed World Hedged
      +29.8% -12.5%               TOTAL my actual portfolio inc changes

This doesn't include the effects of my discount which is paid by giving me more units. This subset is a bit under half of my total investments.

Elsewhere I hold EU small cap and more UK small cap.

It's entirely inappropriate on volatility grounds for almost all posters here and has none of the fixed interest that I do in other ways.

It was built in part to reduce my US exposure compared to what 80% in a global large cap tracker having 65.1% US would have. Currently it's:

33.3% UK
25.7% US
8.5% Chinese
4.7% Japanese
3.7% Money market
3.3% Indian
3.1% Taiwanese
2.3% Australian
2.3% South Korean
13.2% Other

In the Drawdown: safe withdrawal rates topic I wrote in part "You might also favour lower PE10 markets with higher than their usual equity weights" and this partly illustrates how I have acted on that myself.

happyandcontented

If we decided to take the CETV of C800k and self manage or just pay for the basic handling where would those who have done it suggest we put it, as a middle of the road, erring to caution investor?

We accept there will be a crash, but obviously like most people want to hedge our bets to weather it as best we can.

[Deleted User]

happyandcontented wrote: »

If we decided to take the CETV of C800k and self manage or just pay for the basic handling where would those who have done it suggest we put it, as a middle of the road, erring to caution investor?

We accept there will be a crash, but obviously like most people want to hedge our bets to weather it as best we can.

VLS 60. Always a good starting point

[Deleted User]

jamesd wrote: »

Here's the reordered split with 0-12, 12-24 month and 3 year performance after the most recent pricing:

% held 0-12   12-24 3 year cost   name
 9.9% +22.0% - 9.9% +13.4% 1.446% SL Fidelity Asia and, obviously UK. 
10.2% +30.3% -12.7% +14.5% 1.081% SL JP Morgan Emerging Markets
13.6% +30.1% -23.2% + 8.4% 1.106% SL Merian UK Mid Cap
17.7% +44.0% -10.3% +18.7% 0.746% SL SLI UK Smaller Companies
19.4% +21.8% - 8.2% +12.0% 1.066% SL SLI Global Smaller Companies
29.3% +28.6% -12.3% + 9.8% 0.278% SL Vanguard FTSE Developed World Hedged
      +29.8% -12.5%               TOTAL my actual portfolio inc changes

This doesn't include the effects of my discount which is paid by giving me more units. This subset is a bit under half of my total investments.

Elsewhere I hold EU small cap and more UK small cap.

It's entirely inappropriate on volatility grounds for almost all posters here and has none of the fixed interest that I do in other ways.

It was built in part to reduce my US exposure compared to what 80% in a global large cap tracker having 65.1% US would have. Currently it's:

33.3% UK
25.7% US
8.5% Chinese
4.7% Japanese
3.7% Money market
3.3% Indian
3.1% Taiwanese
2.3% Australian
2.3% South Korean
13.2% Other

In the [URL="https://forums.moneysavingexpert.com/discussion/5466114safe withdrawal rates[/URL] topic I wrote in part "You might also favour lower PE10 markets with higher than their usual equity weights" and this partly illustrates how I have acted on that myself.

- You are limiting not just the US but all the developed markets outside Asia.

- Massive tilt to small and EM.

- Why hedge the developed countries? Is that because you believe USD will fall?

Certainly awesome returns in 2019. A bit less than S&P 500 but very good given you limited your US allocations.

Wonder what standard deviation one gets on a portfolio like this.

Linton

happyandcontented wrote: »

If we decided to take the CETV of C800k and self manage or just pay for the basic handling where would those who have done it suggest we put it, as a middle of the road, erring to caution investor?

We accept there will be a crash, but obviously like most people want to hedge our bets to weather it as best we can.

I didn't get the money from a DB transfer but am retired and managing a portfolio of similar size to yours:


"Where to put it" is in my view the last question you should answer. There are more important ones you need to answer first:

1) What do you want from the pension?
For example:
- how much income and when, bearing in mind that your income needs will change over time eg when you receive your SPs.
- how much capital/income do you want when one of you dies?
- do you want any money left over when you both die?
- how much variability in your income can you accept?
- how much variability in your capital can you accept?
- any major lump sum expenditures needed at any time?


2) What is your strategy to achieve (1)?
- do you need a cash or low risk buffer to tide you over the equity crashes or just to reduce volatility? If so how much?
- are you going to get your income from selling capital or potentially with less variability from the natural income from dividend and interest bearing funds, or some mixture of the two? If a mixture, how much from each and how much of your capital will need to be allocated to earch role?

3) Will this work?
From (1) and (2) you have a division of your £800K into safety/buffer. income generation if any and the rest can go to equity. Given an estimate of reasonable returns and a year by year spreadsheet model will this division actually provide the income you require against a range of inflation rates and plausible equity crashes? If not, rethink (1) and (2).


4) Implementation
Once you have a strategy that appears to work, you can then choose types of fund to achieve the separate tasks. This then gives you the requirements on which to identify the precise investments and the % allocations.


Now you know what funds in what quantities you want you should be able to make a rational choice as to the platform(s) you will want to use.

Once you have a financial plan you will be able to monitor it against reality and you should get an early warning if it is going off course or perhaps if it is performing better than plan you can book a world cruise or something. It will also help you accept significant fluctuations in equity values. If you dont have such a plan .......

If this all sounds too difficult or time-consuming you have a choice. Either ask an IFA to help you put together a financial plan for your retirement or simply buy an appropriate risk multi-asset fund, or perhaps 2 such funds to make you feel safer, with perhaps 60% equity, and see what happens.

bostonerimus

Linton wrote: »

I didn't get the money from a DB transfer but am retired and managing a portfolio of similar size to yours:


"Where to put it" is in my view the last question you should answer. There are more important ones you need to answer first:

1) What do you want from the pension?
For example:
- how much income and when, bearing in mind that your income needs will change over time eg when you receive your SPs.
- how much capital/income do you want when one of you dies?
- do you want any money left over when you both die?
- how much variability in your income can you accept?
- how much variability in your capital can you accept?
- any major lump sum expenditures needed at any time?


2) What is your strategy to achieve (1)?
- do you need a cash or low risk buffer to tide you over the equity crashes or just to reduce volatility? If so how much?
- are you going to get your income from selling capital or potentially with less variability from the natural income from dividend and interest bearing funds, or some mixture of the two? If a mixture, how much from each and how much of your capital will need to be allocated to earch role?

3) Will this work?
From (1) and (2) you have a division of your £800K into safety/buffer. income generation if any and the rest can go to equity. Given an estimate of reasonable returns and a year by year spreadsheet model will this division actually provide the income you require against a range of inflation rates and plausible equity crashes? If not, rethink (1) and (2).


4) Implementation
Once you have a strategy that appears to work, you can then choose types of fund to achieve the separate tasks. This then gives you the requirements on which to identify the precise investments and the % allocations.


Now you know what funds in what quantities you want you should be able to make a rational choice as to the platform(s) you will want to use.

Once you have a financial plan you will be able to monitor it against reality and you should get an early warning if it is going off course or perhaps if it is performing better than plan you can book a world cruise or something. It will also help you accept significant fluctuations in equity values. If you dont have such a plan .......

If this all sounds too difficult or time-consuming you have a choice. Either ask an IFA to help you put together a financial plan for your retirement or simply buy an appropriate risk multi-asset fund, or perhaps 2 such funds to make you feel safer, with perhaps 60% equity, and see what happens.

An excellent summary, but I don’t agree with the choice proposed in the final paragraph. The consideration and planning described in steps 1 to 4 are necessary for everyone, whether they do it themselves or through an IFA. Then the investment strategy must be developed and that might be a simple index approach, a multi asset solution, a slice and diced active approach or a combination of those.

Linton

bostonerimus wrote: »

An excellent summary, but I don’t agree with the choice proposed in the final paragraph. The consideration and planning described in steps 1 to 4 are necessary for everyone, whether they do it themselves or through an IFA. Then the investment strategy must be developed and that might be a simple index approach, a multi asset solution, a slice and diced active approach or a combination of those.

I was not intending to advocate the see what happens approach, but rather trying to say that if you dont make a plan that's about all you have left, (and the best of luck!).

bostonerimus

Linton wrote: »

I was not intending to advocate the see what happens approach, but rather trying to say that if you dont make a plan that's about all you have left, (and the best of luck!).

OK, I just wanted to emphasize that “VLS60 etc” isn’t the full story. While it’s a good solution in many circumstances, that does not remove the need for some planning so that you can come up with a suitable asset allocation to meet your financial goals. Knowing your income needs and sources is going to dictate the amounts of annuity, cash, bonds and equities you hold whether that’s in a passive index portfolio , a multi-asset fund or an actively managed sliced and diced portfolio at the other extreme.

Portfolio’s cannot be developed in a vacuum, they are tools to perform a particular task and you need to know what that task is first. It would be silly to use a spade to try to cut down a tree and silly for a 25 year old to use VLS20 or an income producing IT as the core of their pension portfolio.