Active vs Passive Funds

Thrugelmir

MK62 said:

Thrugelmir said:

A company's business model ultimately is the plan as how it intends to make it's profits and grow them into the future. One aspect is that CEO's need to be able to sell that vision in order to raise further equity funding for the company.  Buying an individual company share isn't just about a price on a screen. 

Understood.....but the OP was talking about funds, not individual companies.....but even with individual companies it would get pretty intensive once you got beyond say 10-20 companies.

For funds, it's pretty much a non-starter......most active funds only disclose their top 10 holdings, and once you get to more than a couple of funds you could be looking at hundreds of companies.......for passive funds, it's not relevant really, the fund will invest in the index it tracks - period - doesn't matter what anyone thinks of the companies in it.

Further though, many companies' "business models" are really not much more than corporate PR anyway - the real meat is often commercially sensitive, so isn't disclosed publicly......

You still haven't said how any of this this gives you future performance data though.....fair enough, I can see how you could form an opinion about that that based on this knowledge......but it's an opinion, not data, and opinions on the prospects of companies vary wildly, depending on who you speak/listen to.......

My original comment was merely a light hearted response to the OP asking why past performance data was focused on, when it's future performance that counts......there is no future data, all we have is past data, forecasts and opinions.......if we had actual data, we'd all be rich already.

Not everyone can be rich. The cake can be cut so many ways. Company profitability is finite. Paying more for a share of future profits isn't growth (as in a higher share price). Even before the pandemic global growth was in decline. Companies can only pay their employees less and avoid paying a decent level of corporate taxes for so long...........

MK62

Thrugelmir said:

MK62 said:

Thrugelmir said:

A company's business model ultimately is the plan as how it intends to make it's profits and grow them into the future. One aspect is that CEO's need to be able to sell that vision in order to raise further equity funding for the company.  Buying an individual company share isn't just about a price on a screen. 

Understood.....but the OP was talking about funds, not individual companies.....but even with individual companies it would get pretty intensive once you got beyond say 10-20 companies.

For funds, it's pretty much a non-starter......most active funds only disclose their top 10 holdings, and once you get to more than a couple of funds you could be looking at hundreds of companies.......for passive funds, it's not relevant really, the fund will invest in the index it tracks - period - doesn't matter what anyone thinks of the companies in it.

Further though, many companies' "business models" are really not much more than corporate PR anyway - the real meat is often commercially sensitive, so isn't disclosed publicly......

You still haven't said how any of this this gives you future performance data though.....fair enough, I can see how you could form an opinion about that that based on this knowledge......but it's an opinion, not data, and opinions on the prospects of companies vary wildly, depending on who you speak/listen to.......

My original comment was merely a light hearted response to the OP asking why past performance data was focused on, when it's future performance that counts......there is no future data, all we have is past data, forecasts and opinions.......if we had actual data, we'd all be rich already.

Not everyone can be rich. The cake can be cut so many ways. Company profitability is finite. Paying more for a share of future profits isn't growth (as in a higher share price). Even before the pandemic global growth was in decline. Companies can only pay their employees less and avoid paying a decent level of corporate taxes for so long...........

Exactly.....it's a paradoxical statement about not having future data.......a bit like saying if you knew the lottery numbers beforehand you'd be rich....but then everyone else would know them too, so then you wouldn't be.

Agree about company profitability, and higher share prices without higher earnings etc, and about global growth in general....and about companies paying less etc......I don't really see their relevance to this particular debate though tbh.

coastline

AsifM068 said:

billy2shots said:

AsifM068 said:

The eventual plan, after transfer of funds to Vanguard is to have 40% Global All Cap and 30/30% FTSE 250 and Europe Ex UK ETFs. It's a strategy that I am comfortable with👍

With the magic of Trustnet (and some others), you can set up a portfolio with your current holdings. 

You can then create a portfolio of your intended holdings.

In the charting tool you can then select each portfolio and see how they compared over various points in history. 

Don't worry too much about the cash part when creating the portfolio it's more about the % split between your holdings. I use £100k total investment because it's then very easy to put £ values in each holding (20% in Royal London UK would be £20k etc etc). 


Alternatively tell us your % split and the exact funds they are in and some kind soul will chart it for you. 

Much appreciated sir.

I would like to know the relative performance of the following 3 active RL funds, equally weighted, compared to the Vanguard FTSE Global All Cap please for the past 18 months if at all possible please.

RL UK Growth Trust A
RL Sustainable Leaders Trust A
RL European Growth Trust A

Many thanks

Asif

From the above the Europe and UK funds have underperformed the global tracker but that doesn't mean it will stay that way in the future. Who knows ?
If I'm looking at the correct funds from RL I see they have a global equity fund which has faired reasonably well since launch. Only ideas and not advice.

Royal London Global Equity Diversified M Acc Fund factsheet | Trustnet

Chart Tool | Trustnet

On here I've added VWRL the ETF you've mentioned as a switch.

Chart Tool | Trustnet

RL Sustainable leaders isn't too bad either considering it's UK based.

Royal London Sustainable Leaders (Class C) Income Performance Charts & Tables (hl.co.uk)

AsifM068

coastline said:

AsifM068 said:

billy2shots said:

AsifM068 said:

The eventual plan, after transfer of funds to Vanguard is to have 40% Global All Cap and 30/30% FTSE 250 and Europe Ex UK ETFs. It's a strategy that I am comfortable with👍

With the magic of Trustnet (and some others), you can set up a portfolio with your current holdings. 

You can then create a portfolio of your intended holdings.

In the charting tool you can then select each portfolio and see how they compared over various points in history. 

Don't worry too much about the cash part when creating the portfolio it's more about the % split between your holdings. I use £100k total investment because it's then very easy to put £ values in each holding (20% in Royal London UK would be £20k etc etc). 


Alternatively tell us your % split and the exact funds they are in and some kind soul will chart it for you. 

Much appreciated sir.

I would like to know the relative performance of the following 3 active RL funds, equally weighted, compared to the Vanguard FTSE Global All Cap please for the past 18 months if at all possible please.

RL UK Growth Trust A
RL Sustainable Leaders Trust A
RL European Growth Trust A

Many thanks

Asif

From the above the Europe and UK funds have underperformed the global tracker but that doesn't mean it will stay that way in the future. Who knows ?
If I'm looking at the correct funds from RL I see they have a global equity fund which has faired reasonably well since launch. Only ideas and not advice.

Royal London Global Equity Diversified M Acc Fund factsheet | Trustnet

Chart Tool | Trustnet

On here I've added VWRL the ETF you've mentioned as a switch.

Chart Tool | Trustnet

RL Sustainable leaders isn't too bad either considering it's UK based.

Royal London Sustainable Leaders (Class C) Income Performance Charts & Tables (hl.co.uk)

Many thanks for this👍🙂

Asif

AsifM068

What are upside and downside capture ratios re equity funds anyone please?

Prism

AsifM068 said:

What are upside and downside capture ratios re equity funds anyone please?

You split the performance into two parts - when the market is rising and when its falling. Some funds do better in one situation than the other. Rare ones beat the market when its rising or falling.