LifeStrategy 40

CRAIGSVILLE1

bowlhead99 said:

CRAIGSVILLE1 said:

Linton said:

CRAIGSVILLE1 said:

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

If you are happy with an annualised performance of 7.2% why is the AMC a downside?  The AMC is already included in the 7.2%.

I didn't realise that the AMC is already included in the annualised performance figure ?? 
 

It would be much more difficult to provide comparative charts and annual / annualised performance if it were not.

All costs of the fund's business and operations (the AMC, the other components of ongoing charges figure, the fund's own transaction costs from buying and selling its underlying investments, any taxes it incurs as it goes about its business etc) must inevitably be captured within the movement between 'what it was worth then' and 'what it's worth now'. 
 
The fund manager will report that bottom line performance, or third parties (fund platforms, newspapers etc) will see it for themselves in the published prices and draw their own charts and performance tables. You can't hide the costs because the bottom line is public domain info. It would be quite a bit harder to try to draw a graph of what the gross performance might have been if all those costs didn't exist, because they do exist and they impact the fund's assets.

The costs not included in the charts or performance tables would just be the costs that the fund manager can't control and whose impact would differ for everyone, e.g. how much you pay to your chosen fund platform or advisor for the service of helping you buy and hold the fund, or whether there was a spread between buy and sell prices for the shares on a given day. Those costs would depend on your choice of platform provider, amount invested, pattern of buying/selling activity. 

So the published charts and tables will generally assume you held the investment at the beginning and end of the time period, and let you know how it performed in between.

Thanks again Bowlhead99 👍
Makes the Trojan fund , in my eyes even better value for money than I originally thought 👍

Sally57

Sue58 said:

Linton, could I ask you why you prefer to hold Trojan O as opposed to Personal Assets?

I’m not Linton but I hold Trojan in preference to Personal Assets mainly because of the discount/premium and slightly less volatility in the OEIC version.

CRAIGSVILLE1

bowlhead99 said:

CRAIGSVILLE1 said:

Linton said:

CRAIGSVILLE1 said:

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

If you are happy with an annualised performance of 7.2% why is the AMC a downside?  The AMC is already included in the 7.2%.

I didn't realise that the AMC is already included in the annualised performance figure ?? 
 

It would be much more difficult to provide comparative charts and annual / annualised performance if it were not.

All costs of the fund's business and operations (the AMC, the other components of ongoing charges figure, the fund's own transaction costs from buying and selling its underlying investments, any taxes it incurs as it goes about its business etc) must inevitably be captured within the movement between 'what it was worth then' and 'what it's worth now'. 
 
The fund manager will report that bottom line performance, or third parties (fund platforms, newspapers etc) will see it for themselves in the published prices and draw their own charts and performance tables. You can't hide the costs because the bottom line is public domain info. It would be quite a bit harder to try to draw a graph of what the gross performance might have been if all those costs didn't exist, because they do exist and they impact the fund's assets.

The costs not included in the charts or performance tables would just be the costs that the fund manager can't control and whose impact would differ for everyone, e.g. how much you pay to your chosen fund platform or advisor for the service of helping you buy and hold the fund, or whether there was a spread between buy and sell prices for the shares on a given day. Those costs would depend on your choice of platform provider, amount invested, pattern of buying/selling activity. 

So the published charts and tables will generally assume you held the investment at the beginning and end of the time period, and let you know how it performed in between.

Hi again,

I am off on another tangent again :-)

I was thinking about transferring my pension into Royal London , which has an AMC of 1.0% , with a discount up to 0.65% , depending on how much you have in the pension fund.  Would the annualised performance figure advertised be including the 1.0% also? , so theoretically the annualised performance figure could really be + 0.65% better than advertised ?

bowlhead99

CRAIGSVILLE1 said:

bowlhead99 said:

CRAIGSVILLE1 said:

Linton said:

CRAIGSVILLE1 said:

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

If you are happy with an annualised performance of 7.2% why is the AMC a downside?  The AMC is already included in the 7.2%.

I didn't realise that the AMC is already included in the annualised performance figure ?? 
 

It would be much more difficult to provide comparative charts and annual / annualised performance if it were not.

All costs of the fund's business and operations (the AMC, the other components of ongoing charges figure, the fund's own transaction costs from buying and selling its underlying investments, any taxes it incurs as it goes about its business etc) must inevitably be captured within the movement between 'what it was worth then' and 'what it's worth now'. 
 
The fund manager will report that bottom line performance, or third parties (fund platforms, newspapers etc) will see it for themselves in the published prices and draw their own charts and performance tables. You can't hide the costs because the bottom line is public domain info. It would be quite a bit harder to try to draw a graph of what the gross performance might have been if all those costs didn't exist, because they do exist and they impact the fund's assets.

The costs not included in the charts or performance tables would just be the costs that the fund manager can't control and whose impact would differ for everyone, e.g. how much you pay to your chosen fund platform or advisor for the service of helping you buy and hold the fund, or whether there was a spread between buy and sell prices for the shares on a given day. Those costs would depend on your choice of platform provider, amount invested, pattern of buying/selling activity. 

So the published charts and tables will generally assume you held the investment at the beginning and end of the time period, and let you know how it performed in between.

Hi again,

I am off on another tangent again :-)

I was thinking about transferring my pension into Royal London , which has an AMC of 1.0% , with a discount up to 0.65% , depending on how much you have in the pension fund.  Would the annualised performance figure advertised be including the 1.0% also? , so theoretically the annualised performance figure could really be + 0.65% better than advertised ?

The published return of the fund will use the standard AMC, even though individuals night have a sweet deal and get a better rate.

I don't know the specifics of RL, but for example my workplace pension is with Scottish Widows and standard returns are published based on a 1% management fee, but actually all auto enrollment pensions are required to be no more than 0.75% AMC and individual employers and their advisers/ benefit consultants will have negotiated a lower rate depending on how much business they might be doing with the provider.  So our standard charge is 0.5% and we see that as additional units credited each month for the rebate, even though we see the same 'unit price' as everyone else. Some will get more discount than us and, presumably, some less.

But overall I would get a better return than someone (if there is such a person) who was on the standard 1% rate which is used to calculate unit price and performance

Sue58

Sally57 said:

Sue58 said:

Linton, could I ask you why you prefer to hold Trojan O as opposed to Personal Assets?

I’m not Linton but I hold Trojan in preference to Personal Assets mainly because of the discount/premium and slightly less volatility in the OEIC version.

There is only a slight premium with Personal Assets and no gearing to consider so I was thinking it may be more to do with paying Stamp Duty at 0.5%. It's not a lot on small investments, however a lot of people invest significant amounts into wealth preservation funds (£10K plus) so I suppose you have to consider this in relation to the Trojan OEIC equivalent. 

bowlhead99

Sue58 said:

There is only a slight premium with Personal Assets and no gearing to consider so I was thinking it may be more to do with paying Stamp Duty at 0.5%. It's not a lot on small investments, however a lot of people invest significant amounts into wealth preservation funds (£10K plus) so I suppose you have to consider this in relation to the Trojan OEIC equivalent.

Well, there could be 'gearing to consider', just at the moment they are struggling to find good value assets that fit with their strategy and are sitting tactically on relatively large reserves of cash and bonds. It wouldn't make sense for them to borrow while opportunities are not presenting themselves. That's not to say they wouldn't ever borrow when prices were more depressed. They may use derivatives rather than a loan or finance facility. So if you don't want that, you couldn't buy the trust - you should invest based on what they might do, not on what they are currently choosing to do.

You are right that they do have an effective discount/premium control mechanism as part of their core philosophy, and have periodic shareholder votes to reapprove it - and issuing new shares rather than allowing a premium to develop is one of the reasons they have grown in size over the years.

The Company is prepared to make use of both gearing and liquidity, the former by using short-term borrowed

funds or derivatives such as FTSE 100 Futures. The Company’s gearing will not exceed 50 per cent. of

shareholders’ funds in aggregate. In exceptional circumstances, the Company’s liquidity could be as high as

100 per cent. of shareholders’ funds. These limits would not be exceeded without shareholder approval.

Aminatidi

I have money in both PAT and Capital Gearing Trust and both are what I'd think of as the "old school" type of investment trust where, and I think for me this is a crucial point, the investment managers and many of those associated with the trust have a lot of their own money in the trust.

Yes you have the risk of them going off piste and saying "but it says we can in the terms of the trust" but with the quarterlies and general levels of engagement that seem to be there, for me it's not something that especially concerns me.

What I found much more interesting was drilling into the "MyFolio II Managed" fund that my mum's money was in and trying to work just what the hell she was actually invested in

StellaN

Sue58 said:

Sally57 said:

Sue58 said:

Linton, could I ask you why you prefer to hold Trojan O as opposed to Personal Assets?

I’m not Linton but I hold Trojan in preference to Personal Assets mainly because of the discount/premium and slightly less volatility in the OEIC version.

There is only a slight premium with Personal Assets and no gearing to consider so I was thinking it may be more to do with paying Stamp Duty at 0.5%. It's not a lot on small investments, however a lot of people invest significant amounts into wealth preservation funds (£10K plus) so I suppose you have to consider this in relation to the Trojan OEIC equivalent. 

As others have said, with PNL you do have to consider the premium/discount (although limited), the possibility of gearing being used and also the costs involved ie. stamp duty and dividend re-investment. On the other hand, with Trojan O (Acc version) you don't have to consider any of these points so its possibly a more straight forward choice.  
Performance figures are not dissimilar with PNL just edging it over 1-10 years and as Aminatidi said it appears the fund managers themselves prefer to invest in the IT.

Sue58

StellaN said:

As others have said, with PNL you do have to consider the premium/discount (although limited), the possibility of gearing being used and also the costs involved ie. stamp duty and dividend re-investment. On the other hand, with Trojan O (Acc version) you don't have to consider any of these points so its possibly a more straight forward choice. Performance figures are not dissimilar with PNL just edging it over 1-10 years and as Aminatidi said it appears the fund managers themselves prefer to invest in the IT.

Going back to the thread title, although VLS40 has performed slightly better than Trojan O or PNL over the past 5 years, it is still unclear (and nobody knows yet) whether VLS40 will hold up as well as these wealth preservation type funds during a severe market downfall? 

Aminatidi

Sue58 said:

StellaN said:

As others have said, with PNL you do have to consider the premium/discount (although limited), the possibility of gearing being used and also the costs involved ie. stamp duty and dividend re-investment. On the other hand, with Trojan O (Acc version) you don't have to consider any of these points so its possibly a more straight forward choice. Performance figures are not dissimilar with PNL just edging it over 1-10 years and as Aminatidi said it appears the fund managers themselves prefer to invest in the IT.

Going back to the thread title, although VLS40 has performed slightly better than Trojan O or PNL over the past 5 years, it is still unclear (and nobody knows yet) whether VLS40 will hold up as well as these wealth preservation type funds during a severe market downfall? 

It's one of the paradoxes that I struggle with.

My own money is in Personal Assets and Capital Gearing Trust and Ruffer because I know they have held up well in the past.

The money I've just helped my mum liberate from her ex-IFA has gone in LS40 because it's pretty difficult to look at the likes of Bogle or Kroijer and not do what they suggest.

No doubt that makes me a hypocrite but taking active bets with my own money is one thing but I'm not entirely comfortable doing so with my mums.