Blackrock Consensus

whatstheplan

As some of you know, I've recently started investing.  My first foray is £20k in a S&S ISA with Vanguard, all of it invested in their VS100 product.

I have another £20k to invest this year and intend to put it all into a S&S ISA.  I know my investment sums aren't significant, I also know the chances of anything untoward happening with Vanguard is extremely remote and I'm aware of FSCS protection, however is there any logic in putting my second £20k investment into another comparable product e.g. Blackrock Consensus 100?  The rationale is to have my £40k split across two companies so if something untoward happens within one of them, I'm not 100% invested.

Thoughts please.  I see the Blackrock product has some not insignificant charges however if I'm reading it right, investing via Hargreaves Lansdown significantly reduces this?

The intention with this £40k is to invest it and forget it so-to-speak for minimum 9 years.

dunstonh

As some of you know, I've recently started investing.  My first foray is £20k in a S&S ISA with Vanguard, all of it invested in their VS100 product.

What made you choose VLS100?  It's the only fund in the VLS range that is not multi-asset. It is a global equity fund and effectively a managed fund.  When you compare it with alternative global equity funds, it isn't that attractive. 

Knowing your reasons for selecting that may help us understand why are you are now looking at Consensus 100.

Both VLS100 and Blackrock Cons100 have underperformed the sector average since VLS launched.  Both have underlying trackers but use management decisions on the weightings.  So, what made you pick managed funds that underperform most of the funds in the sector, including the global tracker funds?

whatstheplan

dunstonh said:

As some of you know, I've recently started investing.  My first foray is £20k in a S&S ISA with Vanguard, all of it invested in their VS100 product.

What made you choose VLS100?  It's the only fund in the VLS range that is not multi-asset. It is a global equity fund and effectively a managed fund.  When you compare it with alternative global equity funds, it isn't that attractive. 

Knowing your reasons for selecting that may help us understand why are you are now looking at Consensus 100.

Both VLS100 and Blackrock Cons100 have underperformed the sector average since VLS launched.  Both have underlying trackers but use management decisions on the weightings.  So, what made you pick managed funds that underperform most of the funds in the sector, including the global tracker funds?

Hi, I settled on the VS product range and wasn't interested in a product that included bonds, which left me with VS100.  If you're looking to provide some (at least semi-constructive) feedback then fine, however asking me loaded questions like 'what made you pick managed funds that underperform ...' isn't really helping me at this moment in time, or answering my topic question.  We all need to make a start somewhere, no?  There are 100's of competing products out there and ask 10 different people what's best and you're likely to get at least a few competing pov's.  So, for now, I'm happy leaving my first pot in the VS100 product.  My question relates to if it makes sense to put the second £20k elsewhere so I'm not 100% invested with one company.  Thanks.

underground99

whatstheplan said:
So, for now, I'm happy leaving my first pot in the VS100 product.  My question relates to if it makes sense to put the second £20k elsewhere so I'm not 100% invested with one company.  Thanks.

If the portfolio fund is a good solution for your needs for the first £20k it's not going to be a bad solution for the next £20k. It doesn't sound like you have a different objective for your second £20k and you are not approaching the FSCS compensation limits in case of fraud or impropriety of the fund manager, and a managed fund that holds a bunch of liquid tracker funds using physical replication of the indexes is not inherently at risk of failure.

You're right that we all have to start somewhere but still, as dunstonh says, as the amounts get bigger it is worth considering why you wanted that first fund, to help you consider whether it's still the best thing you can be using. If it is, use it for the second £20k too. If it's not, then use something else for the £40k.

Albermarle

The rationale is to have my £40k split across two companies so if something untoward happens within one of them, I'm not 100% invested.

Blackrock and Vanguard are two of the world's largest investment managers. If one of them was in financial trouble then it would mean something really disastrous had happened, that made the financial crash of 2008 look like a tea party.

Probably at which point you would probably be barricaded in your house defending your stash of baked beans, and your S&S ISAs would be the last thing you would be worrying about.

whatstheplan

underground99 said:

whatstheplan said:
So, for now, I'm happy leaving my first pot in the VS100 product.  My question relates to if it makes sense to put the second £20k elsewhere so I'm not 100% invested with one company.  Thanks.

If the portfolio fund is a good solution for your needs for the first £20k it's not going to be a bad solution for the next £20k. It doesn't sound like you have a different objective for your second £20k and you are not approaching the FSCS compensation limits in case of fraud or impropriety of the fund manager, and a managed fund that holds a bunch of liquid tracker funds using physical replication of the indexes is not inherently at risk of failure.

You're right that we all have to start somewhere but still, as dunstonh says, as the amounts get bigger it is worth considering why you wanted that first fund, to help you consider whether it's still the best thing you can be using. If it is, use it for the second £20k too. If it's not, then use something else for the £40k.

Thanks.  Once I made the decision to invest, whilst I didn't want to jump in with no foresight of what I was doing, neither did I want to spend x months investigating the best approach for my first foray.  And no doubt whatever that approach was, some would still debate its validity, which is of course fine.  I wanted to put the money to work asap, however I also get that x months/years down the line I might conclude VS100 isn't the best place for my investment and move it.

DrSyn

Its your money, if you are happy with that choice and it lets you sleep at night, then its OK.

1.You state that " I see the Blackrock product has some not insignificant charges". Looking at the BlackRock Consensus 100 Class D ACCU GBP MARCH 2021 FACTSHEET, I see the Onging Charge is just 0.21%. What are these not insignificant Blackrock charges you mention? Are you thinking of the platform charge for investing via a fund at HL.

2. As you wanted a 100% equity content, I would be interested why you did not consider using a simple Global ETF which tracks a major global index like the FTSE All World Index or the MSCI World Index? For example VWRL or HMWO. The HL platform charge would have then been considerably less than for a fund.

whatstheplan

DrSyn said:

Its your money, if you are happy with that choice and it lets you sleep at night, then its OK.

1.You state that " I see the Blackrock product has some not insignificant charges". Looking at the BlackRock Consensus 100 Class D ACCU GBP MARCH 2021 FACTSHEET, I see the Onging Charge is just 0.21%. What are these not insignificant Blackrock charges you mention? Are you thinking of the platform charge for investing via a fund at HL.

2. As you wanted a 100% equity content, I would be interested why you did not consider using a simple Global ETF which tracks a major global index like the FTSE All World Index or the MSCI World Index? For example VWRL or HMWO. The HL platform charge would have then been considerably less than for a fund.

I saw a 5% Blackrock charge mentioned on the HL website (fund manager initial charge) that is reduced by 5% if investing through HL.  However when looking at the product factsheet it states 0% initial charge so I'm maybe misreading that.

In answer to your second point, it kind of ties in with my earlier responses.  I liked the underlying funds and spread within the VS100 product.  It's possible I was aware VS100 wasn't/isn't the best performing, however righty or wrongly I wanted to make a start with my investments.  In truth, as my other posts elude to, I'm still undecided re: how to invest the second £20k.  I don't want to lazily slap it into VS100 hence me not making the second investment yet.  I've been looking at the Indexes you mention and they're on my list.  However I saw something on line that mentioned Blackrock's Consensus, hence this topic.

dunstonh

Hi, I settled on the VS product range and wasn't interested in a product that included bonds, which left me with VS100.

Wanting to go high risk into 100% equity is fine. No issues there.     There are 450 funds from 161 fund houses in the IA Global sector.    So, the filter of wanting 100% equity in a global spread took you to 450 funds.  Not just VLS100.    

What did you do to filter those 449 out to leave you with 1?

If that 1 is the best, then why do you want to go with 2nd best or worst now?

If you're looking to provide some (at least semi-constructive) feedback then fine, however asking me loaded questions like 'what made you pick managed funds that underperform ...' isn't really helping me at this moment in time, or answering my topic question.

It helps us understand your process?    You have picked a fund with a near 10 year underperformance record and are looking at a second fund with a near 10 year underperformance record.

You have given us a choice of two funds but in reality, neither is that attractive.  So, why those two?   

ask 10 different people what's best and you're likely to get at least a few competing pov's. 

Absolutely.   Investing is very much about opinion.  However, it does no harm whilst you are inexperienced and learning about investments to understand what you have and the alternatives and make an informed choice rather than picking something just for the sake of it.

whatstheplan

dunstonh said:
Absolutely.   Investing is very much about opinion.  However, it does no harm whilst you are inexperienced and learning about investments to understand what you have and the alternatives and make an informed choice rather than picking something just for the sake of it.

Thanks and yeah I get that.  I wouldn't say I picked LS100 for the sake of it, however I'm happy to admit my choice wasn't fully informed due to my inexperience.  However, at least initially, as long as it's doing something for me I can live with that, even though there are no doubt better performing funds.  The cash sat in my standard account doing nowt for too long, so the fact it's now working for me is a first step on the ladder that I'm happy with.

My second £20k investment is a slightly different matter.  I hope to invest it later this year (Aug-Sep time) and will take on board advice and do further research re: most suitable place to invest.  As touched on earlier, I might elect to move the VS100 pot at some point however, for now at least, it can stay where it is.

Albermarle

I saw a 5% Blackrock charge mentioned on the HL website (fund manager initial charge) that is reduced by 5% if investing through HL.  However when looking at the product factsheet it states 0% initial charge so I'm maybe misreading that.

Many funds state an initial charge on their documents . This is if you buy direct from them . However the charge is almost always discounted by the investment platform you buy it on ( not just HL, they all do the same ) .

It is a bit of a throwback to the past when investing charges were very hefty compared to today .