Multi Asset Fund or Self Managed Portfolio?

eskbanker

swleventhal said:
For some reason LifeStrategy 80% only has history for 1 year 

The reason being that you've selected the ETF rather than the OEIC variant....

ChilliBob

The presentation was on that bright talk website, with the slides, I'm not in front of my pc at the moment so can't easily access it, but it's interesting. 

Fettered and Unfettered has confused me a little, do you mind elaborating? It seems one group is MyMap vls etc, and one is Rathbones right?

Rathbones being the ones taking actual decisions as opposed to VLS etc

eskbanker

ChilliBob said:

Fettered and Unfettered has confused me a little, do you mind elaborating? It seems one group is MyMap vls etc, and one is Rathbones right?

Rathbones being the ones taking actual decisions as opposed to VLS etc

It's not about active v passive - fettered signifies restricted underlying investment choice, so Vanguard LifeStrategy, for example, consists of holdings only of other Vanguard funds, whereas unfettered funds can choose from the whole market.

Thrugelmir

Moe_The_Bartender said:

Thrugelmir said:

OldMusicGuy said:

Moe_The_Bartender said:

I track my portfolio against UK RPI. In retirement, that’s the one that matters if your pot is big enough.

Agree, all I need to do is to be ahead of inflation. That's why getting market average returns is fine for me.

Markets at some point in time are going to underperform inflation. Been a while since they have.  

That’s why you need to diversify. It’s the only free lunch.

Have never said anything different. Highly correlated portfolios self constructed portfolios never come as a surprise. As more often or not built on recent top performers.

Moe_The_Bartender

I've really only skimmed the Yodelar article but it seems to suggest that a Mixed Asset portfolio consists of equities, bonds, cash and er - that’s it. It should also include property, infrastructure, other income producing assets and maybe a bit of gold as an inflation hedge.

It doesn’t make reference to Investment Trusts and anyone looking for a cautiously managed mixed asset investment should look at Capital Gearing Trust and Personal Assets Trust which consistently grind out steady returns.

ChilliBob

eskbanker said:

ChilliBob said:

Fettered and Unfettered has confused me a little, do you mind elaborating? It seems one group is MyMap vls etc, and one is Rathbones right?

Rathbones being the ones taking actual decisions as opposed to VLS etc

It's not about active v passive - fettered signifies restricted underlying investment choice, so Vanguard LifeStrategy, for example, consists of holdings only of other Vanguard funds, whereas unfettered funds can choose from the whole market.

Ah, gotcha, essentially like an IFA or SJP and the like to a degree! Perhaps a bad analogy but I get it. 

JohnWinder

Moe_The_Bartender said:

... a Mixed Asset portfolio consists of equities, bonds, cash and er - that’s it. It should also include property, infrastructure, other income producing assets and maybe a bit of gold as an inflation hedge.

1." While gold objects have existed for thousands of years, gold's role in diversified portfolios is not well understood. We critically examine popular stories such as 'gold is an inflation hedge'. We show that gold may be an effective hedge if the investment horizon is measured in centuries. Over practical investment horizons, gold is an unreliable inflation hedge."  National Bureau of Economic Research https://www.nber.org/papers/w18706

2. ‘A bit of gold’ even if it were a perfect inflation hedge wouldn’t help the whole portfolio struck by inflation, very much.

3. Linkers are our only first class inflation hedging security, during accumulation; you can have a CPI-index linked pension in retirement of course.

4. Property and infrastructure will exist in a stocks/bonds multi-asset fund, as equity and bonds. Direct property and direct infrastructure investments are good alternatives, but less liquid (problem), less frequently valued (more stable apparent value), and wouldn’t have a very different return from their ‘equity versions’ - and almost certainly not enough in view of the small proportions held in a multi-asset fund to make much difference in returns.

Diversification is good, and gold and illiquid assets aren’t stocks or bonds, but are they worth it in a multi-asset fund?

JohnWinder

dunstonh said:

 
The unfettered fund of funds with underlying passives (or mostly underlying passives) tend to be the better ones.  So, if you have identified multi-asset as your preferred solution then the ones you mention are the ones to consider.     You can get away with the fettered versions but I wouldn't personally.

Wise to be cautious about fettered funds in a multi-asset fund, if it's an effort to make a silk purse from some sub-optimal funds. But what of some good funds being bundled by the same fund provider? That's a horse of a different colour.

Whether a multi-asset fund is any good isn't to do with who makes the individual funds and who aggregates them, it's to do with there being an appropriate mix of decent funds. Criteria to assess the former might be: are relevant assets included; are the proportions right; is there sufficient diversification; are the fees low enough? Criteria for the latter, are the usual: is there broad diversification; if it's index tracking is it a sensible index and does it track it closely; is it big enough and well enough established; is liquidity enough; are the fees low enough?

Nothing to do with the relationship between the core fund provider(s) and the multi-asset fund provider it seems to me. To dismiss fettered funds would seem a bit superficial in their appraisal. What am I missing?

eastmidsaver

a good thing about mixed investment funds is they invest in equities and other assets too. you can search the fund that has the equity split you are most comfortable with, for instance 45-85%, or 20-60% etc.    i personally like using these funds as the base of my portfolio, and then add to it with more specific sectors that appeal to me in the moment (for example small cap, emerging markets etc).

dunstonh

Nothing to do with the relationship between the core fund provider(s) and the multi-asset fund provider it seems to me. To dismiss fettered funds would seem a bit superficial in their appraisal. What am I missing?

When we are talking about unfettered underlying passives, then no one fund house has the best trackers in all areas.  So, fettered restricts a little compared to unfettered.  Whilst you shouldn't dismiss the option, you do have to consider it as a negative in your overall assessment.   However, you always consider negatives and positives before making your final decision.