Best way to assess multi asset funds

Cus

Vanguard 80% or 60%, HSBC balanced, Baillie Gifford managed, BlackRock mymap are some of the more common suggestions on here, but there are hundreds out there. Any easy way to assess these? Any comparison or review sites you would recommend?

El_Torro

I (and other people on this forum) always recommend this article:

https://monevator.com/passive-fund-of-funds-the-rivals/

It's over 2 years old now so is not as up to date as it could be. Still, I'm not aware of any better and more up to date articles out there.

eskbanker

Cus said:

Vanguard 80% or 60%, HSBC balanced, Baillie Gifford managed, BlackRock mymap are some of the more common suggestions on here, but there are hundreds out there. Any easy way to assess these? Any comparison or review sites you would recommend?

How do you want to assess them, i.e. on what specific criteria?  Most of those you mention are largely passive, whereas the BG one is active, so that's an obvious differentiator, as is the associated cost variance, but active v passive and ongoing costs are only two of many criteria that could be used, so, as with most investing matters, it's primarily about what you are aiming for.  As well as the Monevator article referred to above, the major platforms and the independent sites such as Trustnet and Morningstar offer analysis of how the funds break down across sectors, markets, asset classes, etc, so that's further info that you can use....

tebbins

There is no one test or factor you could devise that would be "objectively better" than others.

DireEmblem

You cant use 'ongoing costs' as a differentiator on its own.

If I simply told you Fund A has all in costs of 1% and Fund B had all in costs of 2%, and you had to pick one, you would surely pick fund A.

But if we then that that Fund B consistently returned on average 10% per annum, and Fund A returned 8% per annum, could you not say that Fund B's higher operating costs are possible more justified?

There are lots of different ways to look at things, but no one answer is correct.  What might be your best investment choice today for the next 5/10/15 years, might not be the same in 5/10/15 years time.

JohnWinder

1. asset allocation: does the mix of stocks/bonds etc fit with your risk capacity and other investments?

2. index tracking or otherwise?

3. is it tracking sensible, diversified, established, widely used indexes?

4. does the provider have a good record of closely tracking the index they follow?

5. does the 'home bias' annoy you?

6. does the currency hedging, or not, annoy you?

7. does it have a history of sticking to its asset allocation, or if not then changing it according to a plan such as a target date fund?

8. cost

9. accumulation or income? why this should still need to be a choice is unfortunate.

10. is the fund big enough, old enough, reputable enough to have a long life ahead of it?

11. are all my investments with this one provider, or do I need to have investments from different providers?

12. be cautious with synthetic funds, using derivatives.

13. something about the where it's domiciled, for tax considerations.

One could mess with the order, but #1 is pretty important. Performance is in #3 and #4, and ?#7.

Cus

El_Torro said:

I (and other people on this forum) always recommend this article:

https://monevator.com/passive-fund-of-funds-the-rivals/

It's over 2 years old now so is not as up to date as it could be. Still, I'm not aware of any better and more up to date articles out there.

Thanks. I've seen this before, but its from a biased perspective imo, excluding active or expensive funds so doesn't really help me that much.  There are over 200 funds and so it's not easy to assess them on trustnet.

eskbanker

Cus said:

El_Torro said:

I (and other people on this forum) always recommend this article:

https://monevator.com/passive-fund-of-funds-the-rivals/

It's over 2 years old now so is not as up to date as it could be. Still, I'm not aware of any better and more up to date articles out there.

Thanks. I've seen this before, but its from a biased perspective imo, excluding active or expensive funds so doesn't really help me that much.  There are over 200 funds and so it's not easy to assess them on trustnet.

To be fair, that article does clarify that their house preference is for low-cost passive funds, so it's plainly unsuited to someone looking for active or expensive alternatives!

If you're consciously considering active instead of passive, or believe that cheap isn't necessarily better than expensive, then that sounds like you've already been thinking about how to differentiate between competitors, but it does all ultimately come back to articulating what it is that you're looking for?

Thrugelmir

Cus said:

El_Torro said:

I (and other people on this forum) always recommend this article:

https://monevator.com/passive-fund-of-funds-the-rivals/

It's over 2 years old now so is not as up to date as it could be. Still, I'm not aware of any better and more up to date articles out there.

Thanks. I've seen this before, but its from a biased perspective imo, excluding active or expensive funds so doesn't really help me that much.  There are over 200 funds and so it's not easy to assess them on trustnet.

Multi asset funds are by their very nature active.  The choice of indexes tracked, asset classes and weighting attributed to each are in themselves active decisions. 

Write yourself a list of wants and exclusions.  China, emerging markets, UK weighting , property etc etc. 

Most importantly define your personal appetite to risk and volatility. 

JohnWinder

Cus said:

Thanks. I've seen this before, but its from a biased perspective imo, excluding active or expensive funds so doesn't really help me that much. 

I didn't address what are the best ways to assess an actively managed fund because it's too hard. You just don't come as confidently to the crisp, clear 'this one should be good' that you can with index funds. So let us know if you find a set of criteria that looks like you could implement them to give some confident 'this one should be good' answer, preferably having been tested in a different time period.  You can read plenty of waffle, but it's hard to use that for action.

Looking around I find 'past performance' high on one list; no waffle there, but there's plenty to suggest it isn't very reliable predictor of the future. Morningstar research says cost is very important, the dearer the worse the results; that's a hard one to stomach for active investors, and the cheaper a fund gets the more its composition probably resembles an index fund. Keep us informed.