Which Multi-Asset Fund for drawdown?

JamesP8

I am currently reviewing initial fund(s) to select for an imminent DIY drawdown (Aviva). Any suggestions as to a medium to higher risk multi-asset fund please? Presume risk/volatility will usually increase with the proportion of equities. Hoping to average 5% or more annual gross return over 5 years. 

dunstonh

Any suggestions as to a medium to higher risk multi-asset fund please? 

What is your definition of medium to higher risk?  One persons low risk is another persons high risk - so some context is needed.   e..g how much are you prepared for it to fall in any 12 month period?  30%, 40%, 50% etc?

Presume risk/volatility will usually increase with the proportion of equities. 

Not necessarily but its a broad guide.  For example, your equities could be higher risk in selection (emerging markets, smaller cos, focus on higher volatility sectors etc).  So, those would push the risk up even if the equity ratio is the same as one that has lower risk equities.  

Equally, the risk reduction assets are not all one level.    If the fund is using cash or gilts (not index linked) as risk reducers those are lower risk than corp bonds, global bonds or high yield bonds (and others).   So, again, the ratio may not indicate the real risks.

Albermarle

Here is a link to a  comparison table of low cost multi asset funds: It is not just about % equity, there are other differences.
https://monevator.com/passive-fund-of-funds-the-rivals/

[Deleted User]

I would learn about specific risks and then evaluate your personal position. After that I would select asset allocation. 

If you are not prepared to invest a bit of time, the standard/traditional balanced allocation is 60/40 equity to bonds. Something like VLS 60 would be a decent choice. 

[Deleted User]

The ones that come to mind would be the MyMap, HSBC Global Strategy, Vanguard Lifestrategy ranges (all have different products suitable to your chosen risk level). You can do a search on most forums where people compare them.

cfw1994

JamesP8 said:

I am currently reviewing initial fund(s) to select for an imminent DIY drawdown (Aviva). Any suggestions as to a medium to higher risk multi-asset fund please? Presume risk/volatility will usually increase with the proportion of equities. Hoping to average 5% or more annual gross return over 5 years. 

What funds are you currently invested in, & how have they performed for you?
I'm with Aviva (I know they have MANY different pensions) with a membersite, and it allows the same funds I was in pre-drawdown to continue post-drawdown.
I am tempted to maintain the same funds as I move towards that - they have served me well for the past 15 years (with the occasional tweak)..

Audaxer

JamesP8 said:

Hoping to average 5% or more annual gross return over 5 years. 

I think 5 years is too short a timescale to be confident of averaging 5% annual return for any risk level. If there is a equity crash during that period which takes a year or two to recover from, then the return could be a lot lower over that 5 year period, but could still average around 5% over say 20 years or more.

Albermarle

Plus the OP should have a cash fund of at least two years income to tide over any bad year(s) in the market .

IvanOpinion

You might find some ideas here https://citywire.co.uk/funds-insider/sector/aggressive-gbp-funds/i2698/?periodMonths=60&page=1&expandedList=true

BritishInvestor

Albermarle said:

Plus the OP should have a cash fund of at least two years income to tide over any bad year(s) in the market .

Bond or equity markets?

[Deleted User]

Mickey666 said:

Audaxer said:

JamesP8 said:

Hoping to average 5% or more annual gross return over 5 years. 

I think 5 years is too short a timescale to be confident of averaging 5% annual return for any risk level. If there is a equity crash during that period which takes a year or two to recover from, then the return could be a lot lower over that 5 year period, but could still average around 5% over say 20 years or more.

If it’s a managed fund then surely the fund manager(s) would rebalance the fund to move away from equities  if there was such a crash?   Isn’t that the point of a managed fund?

Love the word “surely”. You cannot be serious. 

Also “rebalancing” does not mean what you think it means.