80/20 multi-asset funds

slapPCM

dunstonh said:

I am particularly looking for 80/20 -ish split (as I know HSBC split float from time to time). The other big house names do have strong multi-asset options but not particular in 80/20 split. They are mostly in more conservative categories, e.g. 60/40, or even heavier bond.

Most of the multi-asset funds are risk targetted and this makes them better than a fixed equity split.  So, you shouldn't be focused on equity split but risk level.  Nearly all the similar funds have versions to cover the main risk profiles.

ohhhh here you come @dunstonh yes, that's mostly what I meant but didn't really know how to express it hence unprofessional "80/20 -ish" wording, so yes I am mainly looking that category of risk (I mainly use iweb, so on there it's risk level 5 category).

Now having a second look, I think maybe mymap6 has unnecessary risk compared to mymap5....

bowlhead99

slapPCM said:

dunstonh said:

I am particularly looking for 80/20 -ish split (as I know HSBC split float from time to time). The other big house names do have strong multi-asset options but not particular in 80/20 split. They are mostly in more conservative categories, e.g. 60/40, or even heavier bond.

Most of the multi-asset funds are risk targetted and this makes them better than a fixed equity split.  So, you shouldn't be focused on equity split but risk level.  Nearly all the similar funds have versions to cover the main risk profiles.

ohhhh here you come @dunstonh yes, that's mostly what I meant but didn't really know how to express it hence unprofessional "80/20 -ish" wording, so yes I am mainly looking that category of risk (I mainly use iweb, so on there it's risk level 5 category).

Now having a second look, I think maybe mymap6 has unnecessary risk compared to mymap5....

Well, you were wanting 80% equities , 20% non-equities, and mymap 6 currently has 80% equities with 20% bonds and gold.  The next step down to mymap 5 is 33% fixed income and 5% gold, leaving a lot less equities and target annualised volatility of 8-11% rather than the 10-15% of the mymap6.  The exact holdings can move around a bit to keep within the target risk zones over the course of an economic cycle, just like the HSBC global strategy range, the L&G multi-index range etc. 

Those types of funds don't keep an exact split of bonds to equities or UK to ex-UK or hedged to non-hedged as Vanguard enforces, because their goal is not to deliver whatever the performance happens to be of some fixed ratio of assets (like Vanguard LifeStrategy) but instead to deliver whatever level of risk/volatility the customer is looking to create, which may need to use different building blocks over time depending on what the actuarial analysis is saying about the likely volatility and correlation between the various building blocks available in the markets.

The 'risk level 5' category on a key information document is simply a historic (i.e. backwards looking) measure of actual volatility using some strict formulas and bands created by the european regulators, and there can be quite a difference in risk (and return) between funds that qualify for the same band but may be sitting right at one end of a band or the other; depending on how choppy the markets have been. 

Albermarle

have to say though I have been tempting simple diying like 2 or 3 funds, but then can't really see the advantage over just have a multi-asset fund (apart from the VGOV's 0.07% fee)? enlighten me please...

The main advantage is lower cost as somewhere along the line Vanguard or HSBC etc have to charge for running the 80/20 fund or similar . However the multi asset funds are already quite cheap so we are not talking about huge savings , maybe 0.1% , abd plenty of scope for not doing it correctly and it takes more effort. So for the large majority it is worth paying that small amount extra , in my opinion.

Prism

Baillie Gifford Managed is one of my favourite multi asset funds around the 70% to 80% equity level

slapPCM

@Prism they are not passive right? I had a look, but seems they actively picking stocks? just double checking. I might use it as satellite.

@bowlhead99 Would you say mymap is more like how HSBC runs? And how one should really access a fund's risk level please? I mean there are all measures available, but tricks can be played as well...

AnotherJoe

I dont see the point of 80/20 on a 15 year duration. Just guarantees you will get less growth at a smoother glide path than 100%.

If you are risk averse go for 60/40.

80/20 seems neither here nor there to me.

slapPCM

AnotherJoe said:

I dont see the point of 80/20 on a 15 year duration. Just guarantees you will get less growth at a smoother glide path than 100%.

If you are risk averse go for 60/40.

80/20 seems neither here nor there to me.

tbh, myself is thinking about this, just need to find out if i can still sleep later! lol

aroominyork

HSBC Global Strategy Balanced currently has a little under 60% in equities but over five years had outperformed VLS60. Is that because it has been successful in its asset allocation in different market conditions or because, unlike VLS, it does not overweight the UK?

csgohan4

Prism said:

Baillie Gifford Managed is one of my favourite multi asset funds around the 70% to 80% equity level

Agreed I use them for my satellites, they also manage their star performer SMT.  Surprisingly Vanguard sub contract to BG to manage their global equities active fund. 

Albermarle

aroominyork said:

HSBC Global Strategy Balanced currently has a little under 60% in equities but over five years had outperformed VLS60. Is that because it has been successful in its asset allocation in different market conditions or because, unlike VLS, it does not overweight the UK?

I am pretty sure it is the UK weighting . Blackrock Consensus funds performance have suffered from the same problem. 
The problem is more the equity home bias , I am thinking non equity home bias ( UK gilts etc ) is less of an issue.