Investing in Global Trackers and other similar investments

DoneWorking

older_and_no_wiser said:

Malthusian said:

There is no evidence that any actively managed fund can beat the market

Would anyone here have a belief that some areas of the market are better served with managed funds rather than trackers? For example, I had read that emerging markets and small cap managed funds perform better managed than passive. This is because these markets tend to be more volatile and a fund manager has valuable insights that can spot opportunity and hone in on a smaller subsection of those sectors.

....or did I just dream that? ;-)

True some fund managers may be able to do this but surely not all of them

bostonerimus

DoneWorking said:

One IFA I spoke to told me 

"Trackers are  passive managed funds which means that if markets go down then your funds go with them."

He also reminded me that I am only covered for £85K should Vanguard go bust

Well that IFA is really earning their money...Vanguard basically can't "go bust" and all funds will reflect the performance of the assets they hold. A Vanguard tracker will track the index it follows whereas an actively managed fund will seek to get return disproportionate to the risk in the portfolio, sometimes that works, other times it does not and in the worst case you end up with a Woodford.

DoneWorking

bostonerimus said:

DoneWorking said:

One IFA I spoke to told me 

"Trackers are  passive managed funds which means that if markets go down then your funds go with them."

He also reminded me that I am only covered for £85K should Vanguard go bust

Well that IFA is really earning their money...Vanguard basically can't "go bust" and all funds will reflect the performance of the assets they hold. A Vanguard tracker will track the index it follows whereas an actively managed fund will seek to get return disproportionate to the risk in the portfolio, sometimes that works, other times it does not and in the worst case you end up with a Woodford.

I only spoke to him on the phone 
So no money crossed hands

But I get your point

masonic

older_and_no_wiser said:

Malthusian said:

There is no evidence that any actively managed fund can beat the market

Would anyone here have a belief that some areas of the market are better served with managed funds rather than trackers? For example, I had read that emerging markets and small cap managed funds perform better managed than passive. This is because these markets tend to be more volatile and a fund manager has valuable insights that can spot opportunity and hone in on a smaller subsection of those sectors.

....or did I just dream that? ;-)

A good tracker might not exist for some areas of the market. There are arguments that passive may be easier to beat in areas of the market that are not efficient. Fees are a major consideration, since they raise the bar by which any fund must beat the market in order to deliver superior returns to investors. Those fees don't just include the stated OCF, but also all other fees incurred within the fund, which could be significant. A truly low cost, low turnover, active fund has a better chance than an average priced, high turnover fund. A fund can more easily beat the market if it is higher risk than the market, but will fall further during downturns. Small cap is an interesting example, because passive small cap funds tend to invest mostly in the biggest small companies. These are just a few factors to consider. Fund managers should be considered a liability rather than an expert with valuable insights. Some managers are less of a liability than others, but those who are lauded as having the most valuable insights may be encouraged to do more stupid things (see Woodford, Darwall etc).

GeoffTF

DoneWorking said:

Umiamz said:

Apologies if this has already been discussed but there is a Vanguard ETF - ESG Global All Cap UCITS ETF (V3AM inc, V3AB acc).

This can be held with no platform fee with Freetrade or InvestEngine. Would this be a suitable alternative to the combination of the two funds held above?

Ah - I see that it has been mentioned earlier in the thread. I've been looking for a suitable bond ETF to go along with this but not sure what is "best" in the current environment.

That fund is only a year old and has no long term track record on performance

A long track record on performance is not at all relevant, as others have said. The possible issue is that V3AM is brand new and has total assets of $91.3 Million, i.e. virtually nothing. These ESG funds do not appear to be at all popular. Vanguard liquidated its factor funds when it found that there was little interest. That could happen with the new ESG funds. The OP does not want to be landed with a CGT bill as a result of a forced liquidation. The Ireland domiciled developed world fund has been around for over ten years and has assets of £1 billion. Vanguard is most unlikely to liquidate that one.

Thrugelmir

DoneWorking said:

older_and_no_wiser said:

Malthusian said:

There is no evidence that any actively managed fund can beat the market

Would anyone here have a belief that some areas of the market are better served with managed funds rather than trackers? For example, I had read that emerging markets and small cap managed funds perform better managed than passive. This is because these markets tend to be more volatile and a fund manager has valuable insights that can spot opportunity and hone in on a smaller subsection of those sectors.

....or did I just dream that? ;-)

True some fund managers may be able to do this but surely not all of them

Some retail investors pick the wrong markets to invest in. Market is a generic term. As there are many. What active fund managers can do is not be constrained by the boundaries of an index. Vanguard is mooted frequented on here. Yet they don't benchmark VLS for example. As there's no direct comparable index. Many active funds are forced to select one in order that the fund can be classified. In many ways it's simpler to ignore indexes. Instead focus on the important issues such as finding the potentially best performing investments for your portfolio. 

bostonerimus

Thrugelmir said:

DoneWorking said:

older_and_no_wiser said:

Malthusian said:

There is no evidence that any actively managed fund can beat the market

Would anyone here have a belief that some areas of the market are better served with managed funds rather than trackers? For example, I had read that emerging markets and small cap managed funds perform better managed than passive. This is because these markets tend to be more volatile and a fund manager has valuable insights that can spot opportunity and hone in on a smaller subsection of those sectors.

....or did I just dream that? ;-)

True some fund managers may be able to do this but surely not all of them

Some retail investors pick the wrong markets to invest in. Market is a generic term. As there are many. What active fund managers can do is not be constrained by the boundaries of an index. Vanguard is mooted frequented on here. Yet they don't benchmark VLS for example. As there's no direct comparable index. Many active funds are forced to select one in order that the fund can be classified. In many ways it's simpler to ignore indexes. Instead focus on the important issues such as finding the potentially best performing investments for your portfolio. 

I think a lot of aggravation could be avoided if more investors looked for "adequately performing investments".

Alistair31

Malthusian said:

DoneWorking said:

You are probably right about my concerns over loss and volatility

However I am thinking that for me at this moment in time I would be less anxious with an IFA

Apologies for another possibly brutal post, but as I recall you've been speaking to IFAs since at least 2017. If you were going to "put your trust" in one, which would allow them  limit your anxiety during loss periods, you would already have been receiving ongoing advice for years.

Are you saying this is the same guy who has created a new username to ask the same questions he’s been asking since 2017?  

DoneWorking

Can we keep comments related to the topic in this thread

Thanks

305_15

Alistair31 said:

Malthusian said:

DoneWorking said:

You are probably right about my concerns over loss and volatility

However I am thinking that for me at this moment in time I would be less anxious with an IFA

Apologies for another possibly brutal post, but as I recall you've been speaking to IFAs since at least 2017. If you were going to "put your trust" in one, which would allow them  limit your anxiety during loss periods, you would already have been receiving ongoing advice for years.

Are you saying this is the same guy who has created a new username to ask the same questions he’s been asking since 2017?  

But has he created a new username? Has he been asking the same questions since at least 2017? Maybe he's been speaking to IFA's since 2017, Not necessarily posting on the forum since 2017.