Portfolio Question? BG Funds

Perfect2

Whats the MSE view on BG funds? After doing tremendously well for a few years they have started to tank a fair bit. This started even before the war in Ukraine. Would it be a good idea to consolidate the BG funds into the HSBC global tracker or a similar tracker fund, or stick with BG funds. 

I have only had these 4 funds for about 14 months so i'm looking to hold them for at least another 8-9 to years. I initially chose the BG funds for the high the growth potential the three funds have a lot exposure 43% towards China and the far east.   

noclaf

I was in a BG fund last year in my old pension and learnt a lesson that one should always look 'under the hood' to understand what/how a fund is invested. This BG fund was heavily skewed to 'growth' and a very narrow set of companies at that + 28% was allocated to EM. So relatively, the fund was very volatile...big gains but big drops too.

Initially the fund did well, was up 16%...happy days ..that was untill the latter part of last yr where the fund along with many other growth-focussed BG funds took a hammering. It ended up -24% down. I've since moved the pension to a SIPP and primarily invested in a cheap global equities etf that invests in a broader set of companies and 'globally' hence more diversification.

So to conclude, nothing wrong with BG funds as long as you know exactly what you are investing into and how it aligns with your risk tolerance and overall investing strategy/goals etc

adindas

You are already down 35%, 32%. So, if you switch it HSBC Global you want to sell t a loss??

You will need to understand that This BG fund was heavily weighted to 'growth' stocks and emerging market only focus on a few companies. High growth companies are recently beaten down, not only BG funds. Just look at Meta Platform, Tesla, Nio, etc the history has told these companies are likely to come back. And learning from their performance, for good growth stock they will recover with multipliers. It is not uncommon they could up 20-30% in less than a week.

You invest in fund not a stock, it is highly unlikely to go to zero. Just learn the lesson those who sold their stocks in March 2020 during pandemic.

You will to make your own decision. But in my personal opinion keep juggling from one side to the other just to make a loss is not a good strategy.

Perfect2

I am extremely reluctant to sell in a falling market. I am looking focus more on global trackers in the long term though because this appears to be a more cost effective investment strategy.   

Albermarle

I am extremely reluctant to sell in a falling market

In the last 3 weeks 

the FTSE 100 is up 7% 

Germany's Dax is up 10%

S&P 500 is up 9%

dunstonh

Whats the MSE view on BG funds? After doing tremendously well for a few years they have started to tank a fair bit. This started even before the war in Ukraine.

The thing to remember is that BG funds are some of the highest risk funds in their respective sectors.  Great when an area is going up but not so when its going down.   

 I initially chose the BG funds for the high the growth potential the three funds have a lot exposure 43% towards China and the far east.

So what has changed in your strategy that makes you consider changing after the first negative period?

Thrugelmir

Perfect2 said:

I am extremely reluctant to sell in a falling market. 

BG have invested heavily in unlisted companies as a strategy. The valuations of which have been marked down following events of recent months. Interest rates in particular aren't favourable to, in particular as yet, unprofitable  "growth" companies. Nothing wrong in the strategy per se, however an individual investors risk exposure needs to be tailored accordingly. As everybody chases returns in what is an extremely challenging environment.