Safe fund beating savings accounts?

Gary1984

To get closest to what you want you should probably keep 90% of your money as cash and put 10% into an all world equity tracker. If the tracker returns 6.5% then this would add about 0.5% onto your total return and get you towards 2%. However even then you're at risk of losing 40% of the tracker value in a month so 4% overall and therefore still more than double the acceptable 1.5%.

Ultimately what you want doesn't exist. 

Sailtheworld

That's right. You can demand a return for a certain risk but you can't just dial up the risk such that you move from a 1.8% steady return to a 2.5% steady return because the curve, as well as moving to the right, also changes shape such that the return is more variable. Albeit, on average, the expected return is 0.7% higher.

sebtomato

SFindlay said:

sebtomato said:

SFindlay said:

sebtomato said:

Yes, I know no funds are as safe as savings accounts.
However, some funds are more risky than others, and some funds must have performed well during the recent crisis while still giving small returns (e.g. 2% pa).
I am ideally looking for something that doesn't swing too much, and has moderate returns above savings account.

You clearly don't understand, there is NO magical fund like you are seeking, don't you think everyone would be investing there if there was?!?!? 
Stick with the 1.2 or 1.3 % that you're getting and research investing until you understand the risks and accept there is no fund that will guarantee you a better rate than your savings accounts.  

higher risk = higher interest/returns. Therefore, there must be some lower risks options with lower returns (but still a bit higher than 1.3%)... I just don't know what those are currently.

I think you just showed in that one paragraph that you dont understand!! 

I am sorry but the whole financial market is predicated on risk vs. returns.
For instance, a mortgage from a bank has a higher rate when the customer is more risky (e.g. higher loan to value, so bank at risk of losing money if the property price drops by more than say 20%).
A credit card rate is also higher when the customer has a worse credit rating = more risky again.
You would yourself use a higher interest rate if you were lending money to someone who can't get a loan through a traditional bank (e.g. P2P), so higher possible return but also higher risk to lose some of the capital.
For investment funds, it's the same: more risky = higher potential for returns/high rate, more volatility.
Therefore, I am not looking for something with high volatility that could increase by 10% per year, but something with lower volatility that is more likely to deliver a target of 2% (with a risk it could be more or less, like anything on the stock market).
I know that investing in Amazon or Microsoft could have much higher returns than investing in US treasury bonds, but also the risk is significantly higher.

sebtomato

Gary1984 said:

To get closest to what you want you should probably keep 90% of your money as cash and put 10% into an all world equity tracker. If the tracker returns 6.5% then this would add about 0.5% onto your total return and get you towards 2%. However even then you're at risk of losing 40% of the tracker value in a month so 4% overall and therefore still more than double the acceptable 1.5%.

Ultimately what you want doesn't exist. 

Sorry, not sure that works.
If I had £100 to invest:
* £90 would be on a savings account at 1%, so earning 90p per year
* £10 would be on the stock market. If it was to lose 40% of its value, I would lose £4
Therefore, the return for the year would be minus £3.1 (or I would be left with £96.9, or -3.1%)

Albermarle

I think maybe best to concede that your ambition to get 2% pa, almost risk free, is a lost cause . Same as with your previous attempt to get HL to reduce their platform fee . 

Sailtheworld

sebtomato said:

Gary1984 said:

To get closest to what you want you should probably keep 90% of your money as cash and put 10% into an all world equity tracker. If the tracker returns 6.5% then this would add about 0.5% onto your total return and get you towards 2%. However even then you're at risk of losing 40% of the tracker value in a month so 4% overall and therefore still more than double the acceptable 1.5%.

Ultimately what you want doesn't exist. 

Sorry, not sure that works.
If I had £100 to invest:
* £90 would be on a savings account at 1%, so earning 90p per year
* £10 would be on the stock market. If it was to lose 40% of its value, I would lose £4
Therefore, the return for the year would be minus £3.1 (or I would be left with £96.9, or -3.1%)

It's likely nothing's going to work because the product you're looking for doesn't seem to exist. 

coachman12

Having just read this thread for the first time, I have to say that some  MSE members have given best advice available-----all of which has been found lacking or useless by O/P who is living in a fantasy world and stamping his foot because he cannot create his own financial nirvana. 
The best suggestion I have read on this thread is the 5 year RCI deal ( and similars ), but of course that's of no interest to O/P. Seems a wasted thread. 
Of course I, like a  few others on these Forums, could give O/P some good investment advice relating to specific companies that are very likely to do very well in 2020/21------and I think I'd have a 95% chance of getting what the O/P needs------but who's going to tell him ? Not me 

mollycat

coachman12 said:

Having just read this thread for the first time, I have to say that some  MSE members have given best advice available-----all of which has been found lacking or useless by O/P who is living in a fantasy world and stamping his foot because he cannot create his own financial nirvana. 
The best suggestion I have read on this thread is the 5 year RCI deal ( and similars ), but of course that's of no interest to O/P. Seems a wasted thread. 
Of course I, like a  few others on these Forums, could give O/P some good investment advice relating to specific companies that are very likely to do very well in 2020/21------and I think I'd have a 95% chance of getting what the O/P needs------but who's going to tell him ? Not me 

Just because the OP is misplaced in his belief that a product that gives them the required return at limited risk, there's no need to describe him using such a mocking tone; especially since many of your recent posts have berated fellow posters for unhelpfulness, rudeness, and "being pieces of work".
I see no evidence that the OP is "stamping his foot" or living in a "fantasy world", I'm reading his posts as reasonded, (but misguided).
Of course someone that likes to tell internet forums about their 1st class degree, might know better, I suppose.

sebtomato

coachman12 said:

The best suggestion I have read on this thread is the 5 year RCI deal ( and similars ), but of course that's of no interest to O/P. Seems a wasted thread. 

I never said I would be willing to lock down my money for 5 years, just to get some mediocre interest rate, so no, that suggestion doesn't work for me, sorry.

sebtomato

To clarify, I never said I was looking for a financial product giving 2% pa with NO risk. I said with LOW risk (proportional to the low return, and in relation to a 1% savings account with NO risk).
There are some financial products that are lower risks than others. No all bonds carry the same risks (some are more likely to be paid than others).
I think it's just difficult to navigate through all the funds available and understand the risk carried through the underlying investments. Site likes Trustnet give a risk rating, but it's hard to know what it means.