Baillie Gifford Long Term Global?

Flatulentoldgoat

Anyone have any thoughts on this over Vanguard (VWRL or LS100)

The on going charge is higher at 0.65% Vs 0.23%

Thinking of selling off my SIPPS, LISA and a large chunk of my SISA.

Performance seems a LOT stronger.

Anyone?

Linton

BG long term Global is a high risk fund in that it is only invested in 35 companies concentrated in particular sectors.  The top ten holdings represent 50% of the whole fund with 9% of it in Tesla.  It has increased 200% in 3 years compared with VLS100's 33%.  It is difficult to see how this level of performance can continue.  WIth such a fund the costs are irrelevent compared with the possible gains or losses. 

So if you bought it you should be prepared for a very exciting journey and I think  it should only be considered, as its name suggests, for the very long term - eg 20 years.  I do not think it is suitable as a high % of one's life savings. If it were to fit in my portfolio I would not want a holding of more than perhaps 10%.

Thrugelmir

Flatulentoldgoat said:

Performance seems a LOT stronger.

If you invest in a fund that holds a concentrated number of stocks. Then expect performance to diverge significantly from those that reflect the broader market. No fund manager maintains their mantle for ever. Ideas get copied. 

Alexland

Slightly under 100% return last year at which point it would be 80% likely to lose money over the next 3 years.

https://citywire.co.uk/new-model-adviser/news/when-funds-rise-over-100-in-a-year-what-happens-next/a1453835

Flatulentoldgoat

Alexland said:

Slightly under 100% return last year at which point it would be 80% likely to lose money over the next 3 years.

https://citywire.co.uk/new-model-adviser/news/when-funds-rise-over-100-in-a-year-what-happens-next/a1453835

Ahhh, interesting. I did wonder if they looked a bit over inflated and obviously growth cannot be sustainable and exponential? If I'm honest, on my SIPP I really want to be more fire and forget. Back to vanguard I go perhaps...

JohnWinder

I can feel how choosing between those two can be a difficult decision. But one might want to compare the Sharpe ratios, which take risk into account with returns, to help. Higher returns with BG might not appeal so much if the risk measure was disproportionately high compared to the alternative(s).

Yes, a fund's annual cost seems unimportant when returns are sky high, but it is the extra cost compared with the fund's outperformance compared with the alternative fund that matters; and of course, possible returns include low or negative ones at times without costs changing.

Steve182

If you cannot decide, 50/50?

DireEmblem

https://citywire.co.uk/new-model-adviser/news/when-funds-rise-over-100-in-a-year-what-happens-next/a1453835

https://www.morningstar.co.uk/uk/news/209527/why-investors-should-buy-the-unloved.aspx

You might find those two articles interesting.

The first basically says that since 1990, from the 124 funds that have gained more than 100% in a year, 80% of them lost value in the following 3 years.  LTGG made over 95% last year.

The second is an analysis of funds with the highest net outflows from three different sectors, showing if you invested in them instead, you would have a higher return than the most popular funds.

Now that is based on historic information, and last performance does not infer future performance, that being said we are in a different position right now.

It is in the interest of governments to support the markets around the world, and encourage inflation.  Why?  Well it is the simplest means for them to reduce their debts without paying them off - to deflate their debt value vs GDP.  As a result I do think markets will continue to recover, and some others will see ‘corrections’

Imo, diversity is key.

Alexland

DireEmblem said:

https://citywire.co.uk/new-model-adviser/news/when-funds-rise-over-100-in-a-year-what-happens-next/a1453835

I am surprised nobody posted that link earlier... but seriously BG funds have had an amazing year benefiting from the ramping up of certain disruptive company prices and some holdings are now sitting at extremely rich and sometimes insane valuations. These companies are favourites with the new generation of day traders many of whom have been stuck at home which gives time to play. We often hear "it doesn't matter because I will sell if it starts looking unfavourable" but then if everyone is thinking that then you could see some pretty dramatic price volatility. The way people are talking about these companies reminds me of what happened with tech stocks in the late 90s.

[Deleted User]

This is basically the OEIC version of SMT without the private equity (which is around 25% of SMT) as such you miss out on SpaceX etc.
I own SMT, have done for a while and the results are spectacular, however I barbell this fund with SAIN - a cautious income fund.

gary83

I was interested in this thread as I’ve held this fund within a LISA for the last 2 years as part of my retirement planning (the money won’t be available for another 22 years & it’s only a small part of my investment - I also have a public sector pension & a SIPP) even though it’s a high risk fund as I’m not planning on accessing it for so long I’m happy to take the risk.

It’s much easier to say that though when it represents a small part of your total investment & you’ve benefitted from the growth of the last two years. I agree with Linton above, I think for me this fund has its place but I wouldn’t be rushing to invest in it with anything that I could be expecting to need over the shorter term.