Where to invest now the coronavirus has hit the markets

Marxie9

We have OEIC's investments with Co-Funds who are owned by Aegon. Due to coronavirus, does anybody know whether or not we should cash these in?

Thrugelmir

Do you need the money now? 

coyrls

Marxie9 said:

does anybody know whether or not we should cash these in?

No    

dunstonh

Marxie9 said:

We have OEIC's investments with Co-Funds who are owned by Aegon. Due to coronavirus, does anybody know whether or not we should cash these in?

The answers will be the same as every other thread and post where the person has asked the same thing.

2_4

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

kinger101

2_4 said:

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

There are a number of "recovery" funds that target companies the have had some sort of setback but in the opinion of the managers, have good potential for recovery.  Read through some of these.  Nearly every company now meets the criteria for setback, so they're not based on global or national recoveries per se.
https://www.trustnet.com/fund/search/recovery
The question, like always, is whether the fund manager's opinion worth their fee?   Looking through many of them, they've been waiting a very long time for RBOS and Lloyds to recover.

doe808

Added to an infrastructure fund, but thats it. Business as normal otherwise.

If it hadnt been for Fidelity texting me the other day- I would have no idea of the exact value of what I hold at the moment, bar a rough calculation in my head.

tropic_of_Username019

2_4 said:

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

Why wouldn't you want to expose yourself to companies which may not survive? Their prices have been marked down (further than the market as a whole) to reflect the risk that they won't survive. Some won't survive, and will lose shareholder's money; but others will, and their prices will bounce back more strongly when it turns out they're pulling through after all.

Wanting to avoid such companies is contradictory to wanting to cash in on any recovery. Because it's the worst hit companies that have the potential to let you cash in on a recovery, if things get better sooner or faster than the market is currently allowing for. They also have the potential to do worse than the market, if things turn out worse than current market prices imply.

In short, I see no reason to move away from very wide-ranging funds (such as VLS 100) in the current situation. Such funds include exposure to a broad range of both companies which are worse affected by the current crisis (but with greater recovery potential) and companies which are less affected (but with less recovery potential).

bowlhead99

tropic_of_Username019 said
Why wouldn't you want to expose yourself to companies which may not survive? Their prices have been marked down (further than the market as a whole) to reflect the risk that they won't survive. Some won't survive, and will lose shareholder's money; but others will, and their prices will bounce back more strongly when it turns out they're pulling through after all.

Wanting to avoid such companies is contradictory to wanting to cash in on any recovery. 

Hear hear.
Though personally I am being selective about the things in which I invest, and still have a good chunk of sideline money, it's clear that companies that are cheap because they might die or never recover, are the ones that stand to gain the most in share price if they do recover.

A typical cap-weighted index fund may not be the best way to capitalise on such opportunities of course, because if you put new money into such a fund it will spend the money by allocating the least of it to the companies with the smallest valuations and most of it to the companies with the largest valuations.  That said, the UK All-share index held by VLS100 provides about 8 times as much exposure to something like  (e.g.) Lloyds Bank which has fallen close to 50% since mid-December than it does to (e.g.) HICL Infrastructure which has fallen less than 5% over that timeframe  (former is £25bn market cap, latter is £3bn). So you do get access to some big name companies at depressed valuations which will hopefully recover over time.

EdGasketTheSecond

tropic_of_Username019 said:

2_4 said:

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

Why wouldn't you want to expose yourself to companies which may not survive?

I would have thought that is pretty obvious. If the companies do not survive you lose 100% of your investment.