UK based funds - brexit and onwards

VXman

I have have 10K in HL UK Growth funds since June 2019. I initially regretted this purchase as it dipped below my initial purchase cost and hovered around there for a long time. I told myself that as soon as it got a little above what I paid for it I would sell. Particularly as I have invested now around £40K in HL Global growth funds in the same time and they have consistently performed well. 17% since June 2019 but has been up in the 20%'s at points.

In the end I decided to keep the 10K in UK Funds and not increase but to see how it does over time just out of interest. It's now at 11% return since June 2019.

So, the question is: Should we be looking at putting money in to UK stocks/funds now brexit has been settled. Do people think the long term will be positive for UK companies or not?

dunstonh

I have have 10K in HL UK Growth funds since June 2019

One of the aims of going DIY is to save money compared to solutions provided under advice.    You are currently paying more that you should be.

 I initially regretted this purchase as it dipped below my initial purchase cost and hovered around there for a long time. I told myself that as soon as it got a little above what I paid for it I would sell.

investments will have periods when they go down.    Always have.  Always will.   You must have known that when you made the decision to invest.  So, why did you get concerned when it happened?

So, the question is: Should we be looking at putting money in to UK stocks/funds now brexit has been settled. Do people think the long term will be positive for UK companies or not?

Brexit should really have had very little influence on your asset/sector allocation strategy.   It may have influenced whether you held more or less in small, medium or large cap but if you use a model that has home bias then it would always have more than a model that has no home bias.

We dont know what model you are using. Or even if you are using a model or not (you could be making pretty random selections - which is not a good idea but lots do it).

VXman

dunstonh said:

I have have 10K in HL UK Growth funds since June 2019

One of the aims of going DIY is to save money compared to solutions provided under advice.    You are currently paying more that you should be.

 I initially regretted this purchase as it dipped below my initial purchase cost and hovered around there for a long time. I told myself that as soon as it got a little above what I paid for it I would sell.

investments will have periods when they go down.    Always have.  Always will.   You must have known that when you made the decision to invest.  So, why did you get concerned when it happened?

So, the question is: Should we be looking at putting money in to UK stocks/funds now brexit has been settled. Do people think the long term will be positive for UK companies or not?

Brexit should really have had very little influence on your asset/sector allocation strategy.   It may have influenced whether you held more or less in small, medium or large cap but if you use a model that has home bias then it would always have more than a model that has no home bias.

We dont know what model you are using. Or even if you are using a model or not (you could be making pretty random selections - which is not a good idea but lots do it).

Strange slightly critical response to a simple enquiry.
Don't particularly want to go fully DIY. Never have done. I'm aware HL aren't the cheapest but this is just a part of my portfolio.
I'm aware investments go down - which is why I never sold. I am happy to keep this 10K there as a little experiment. Not concerned at all. I said I regretted it initially as I was comparing UK performance against Global. I am fortunate to take the attitude if I lost it all it;s no big deal in the grand scheme. (Not that I believe that is likley)

Look, I don't claim to be a experienced investor. I am just looking for places to put my money as savings rates are so poor. I'm already retired on a decent final salary pension, house owner and no debts. These are additional savings which are purely for funding funstuff! 

I'm not using a model, but I'm also not chucking money in risky stocks. Actually returns on my investments have been an average of 10% over all over the last couple of years so I'm happy with that. No doubt I could do better but I know my limits.

dunstonh

Don't particularly want to go fully DIY. Never have done. I'm aware HL aren't the cheapest but this is just a part of my portfolio.

you are picking the platform.  You are picking the investment funds.  You are making the decisions.   Currently, by using HL own brand funds you are paying more than you need to.   

I'm not using a model, but I'm also not chucking money in risky stocks. Actually returns on my investments have been an average of 10% over all over the last couple of years so I'm happy with that. No doubt I could do better but I know my limits.

When using single sector funds, you should have an investment strategy in place to decide your model.  i.e. x% in UK, y% in Europe etc.   If you just pick random numbers and buy on that basis, you will almost certainly end up with lower returns in the long run and any above-average gains in a period will be a fluke.   If you do not have a strategy then you should stick with multi-asset funds or a global (inc UK) tracker.   

Another_Saver

It's not that HL aren't the cheapest, more that those funds are particularly uncheap and of debatable quality.
As for the UK/global debate, the past 5 years the UK has done crap (or since 2007 and 2013, but not consistently). If you look at any long term period out to 1990 that includes the last 5 years, the UK has done crap even though until the last 5 years, the UK and global market were more or less behaving the same way (comparing large Cap or total market indices on a nominal total return basis in £, just use the indices or sectors on trustnet or compare Barclays UK equity index with S&P 500 total returns data which is widely available) and have performed similarly over the very long term.
Some see this as an indicator of a new norm, others like me see this as a buying opportunity.

There isn't really a consensus, though a fair few seem to share the more balanced view that if you already have a UK bias now, getting rid of it and going 100% global would be like selling low to buy high. A UK bias is having anymore than 4-5% of your equity allocation in UK stocks, as that is how much of the global market the UK makes up depending on which indices you look at.

Personally I don't like those funds and my opinion is you may as well use a product like vanguard lifestrategy 100 to get the same kind of exposure with the same kind of home bias (insert active/passive debate, home bias debate, Vanguard not the cheapest for £50k debate, HL Growth funds debate etc. here).

NottinghamKnight

VXman said:

dunstonh said:

I have have 10K in HL UK Growth funds since June 2019

One of the aims of going DIY is to save money compared to solutions provided under advice.    You are currently paying more that you should be.

 I initially regretted this purchase as it dipped below my initial purchase cost and hovered around there for a long time. I told myself that as soon as it got a little above what I paid for it I would sell.

investments will have periods when they go down.    Always have.  Always will.   You must have known that when you made the decision to invest.  So, why did you get concerned when it happened?

So, the question is: Should we be looking at putting money in to UK stocks/funds now brexit has been settled. Do people think the long term will be positive for UK companies or not?

Brexit should really have had very little influence on your asset/sector allocation strategy.   It may have influenced whether you held more or less in small, medium or large cap but if you use a model that has home bias then it would always have more than a model that has no home bias.

We dont know what model you are using. Or even if you are using a model or not (you could be making pretty random selections - which is not a good idea but lots do it).

Strange slightly critical response to a simple enquiry.
Don't particularly want to go fully DIY. Never have done. I'm aware HL aren't the cheapest but this is just a part of my portfolio.
I'm aware investments go down - which is why I never sold. I am happy to keep this 10K there as a little experiment. Not concerned at all. I said I regretted it initially as I was comparing UK performance against Global. I am fortunate to take the attitude if I lost it all it;s no big deal in the grand scheme. (Not that I believe that is likley)

Look, I don't claim to be a experienced investor. I am just looking for places to put my money as savings rates are so poor. I'm already retired on a decent final salary pension, house owner and no debts. These are additional savings which are purely for funding funstuff! 

I'm not using a model, but I'm also not chucking money in risky stocks. Actually returns on my investments have been an average of 10% over all over the last couple of years so I'm happy with that. No doubt I could do better but I know my limits.

I think you are being a bit over sensitive, there's nothing that isn't factual in dunstonh's response. 
I don't think you give enough detail to determine exactly which fund you have invested in but it would appear that costs are in excess of 1% pa, which is 2-3 times what they should be when going diy, and this will obviously hit your returns. It would be best to look for a lower cost provider with lower cost funds, compounding 0.5-0,75% per year will have a significant effect on total return. 
If what you report is all of you investments then you are looking at 20% plus in uk equities when a neutral tracker would have 4-5%. Being overweight in uk funds is down to personal choice, home bias is what many investors do and it may be justifiable, however your total costs using the funds you do in hl are just to high, you are handing over a significant part of your long term returns in fees. 

Prism

Another_Saver said:

 If you look at any long term period out to 1990 that includes the last 5 years, the UK has done crap even though until the last 5 years, the UK and global market were more or less behaving the same way (comparing large Cap or total market indices on a nominal total return basis in £, just use the indices or sectors on trustnet or compare Barclays UK equity index with S&P 500 total returns data which is widely available) and have performed similarly over the very long term.
Some see this as an indicator of a new norm, others like me see this as a buying opportunity.

I am more and more thinking that it is a technology revolution that we are sitting out, at least as far as the companies leading it. I can see the UK stocks doing reasonably well going forward but I'm not sure we will make up the ground already lost. I don't think there is a return to mean coming along.

Another_Saver

Prism said:

Another_Saver said:

 If you look at any long term period out to 1990 that includes the last 5 years, the UK has done crap even though until the last 5 years, the UK and global market were more or less behaving the same way (comparing large Cap or total market indices on a nominal total return basis in £, just use the indices or sectors on trustnet or compare Barclays UK equity index with S&P 500 total returns data which is widely available) and have performed similarly over the very long term.
Some see this as an indicator of a new norm, others like me see this as a buying opportunity.

I am more and more thinking that it is a technology revolution that we are sitting out, at least as far as the companies leading it. I can see the UK stocks doing reasonably well going forward but I'm not sure we will make up the ground already lost. I don't think there is a return to mean coming along.

To refer to some sources and points I have used before:

The concept of productivity increasing technology is not limited to what companies categorised as tech can sell.

Buffett and Jay R Ritter have argued that technology does not tend to benefit capital owners but consumers, as new capital needs to be deployed not just to develop it but mainly for the uptake and infrastructure. If you believe the pace of technological change to be accelerating, that also increases the attrition rate, the pace of redundancy of existing technological capital.

It may well be however as Erik Brynjolfsson argues that the unique characteristics of this current/coming technological evolution mean those usual principles do not apply (internet and AI are reproducible and scalable at no/negligible marginal cost, internet/information age tech is a completely new means of communication/production/consumption, machine learning can improve itself with only an electricity supply and hardware maintenance, internet is a truly equal global marketplace that creates new opportunities). Or you could see this as just another Canal/Rail/Car/Phone/Post-War Dream/Dot Com Mania and carry on regardless.

Thrugelmir

VXman said:

So, the question is: Should we be looking at putting money in to UK stocks/funds now brexit has been settled. Do people think the long term will be positive for UK companies or not?

How does the investment fit into your overall portfolio strategy?  Every portfolio will have a laggard.  No one can pick which sectors will perform best in the near term future. 

NottinghamKnight

Prism said:

Another_Saver said:

 If you look at any long term period out to 1990 that includes the last 5 years, the UK has done crap even though until the last 5 years, the UK and global market were more or less behaving the same way (comparing large Cap or total market indices on a nominal total return basis in £, just use the indices or sectors on trustnet or compare Barclays UK equity index with S&P 500 total returns data which is widely available) and have performed similarly over the very long term.
Some see this as an indicator of a new norm, others like me see this as a buying opportunity.

I am more and more thinking that it is a technology revolution that we are sitting out, at least as far as the companies leading it. I can see the UK stocks doing reasonably well going forward but I'm not sure we will make up the ground already lost. I don't think there is a return to mean coming along.

The UK does very well in many aspects of tech, from individuals and technical personnel through to research. The difficulty is that the big us and asian firms will pick off growing uk companies when they are worth up to a few billion, a consequence of having an open market (good thing) but also short termism (bad thing). ARM was the obvious example in the recent past. It's probably something that the government should be doing more about, maybe through tax breaks or similar to try and retain the (potential or actual) unicorns as they grow.

VXman

dunstonh said:

Don't particularly want to go fully DIY. Never have done. I'm aware HL aren't the cheapest but this is just a part of my portfolio.

you are picking the platform.  You are picking the investment funds.  You are making the decisions.   Currently, by using HL own brand funds you are paying more than you need to.   

I'm not using a model, but I'm also not chucking money in risky stocks. Actually returns on my investments have been an average of 10% over all over the last couple of years so I'm happy with that. No doubt I could do better but I know my limits.

When using single sector funds, you should have an investment strategy in place to decide your model.  i.e. x% in UK, y% in Europe etc.   If you just pick random numbers and buy on that basis, you will almost certainly end up with lower returns in the long run and any above-average gains in a period will be a fluke.   If you do not have a strategy then you should stick with multi-asset funds or a global (inc UK) tracker.   

Well, thanks for your unsolicited advice. Was't actually the point of my post.