cgar & cgt opinion

Thrugelmir

Rollinghome said:

aroominyork said:

Rollinghome said:

mears1 said:

The fund manager said the following two investments are similar in return and assets and both contain Index bonds, which are better than nominal bonds (not the type which are getting a negative press).

What are your thoughts & experience on the following? If they are so similar, would  you go with the one with the cheaper ongoing charge, cgar. Also, there is no stamp duty to pay and  it has the advantage of being on OEIC?

CGT return has averaged about 1.5% pa more than CGAR over last 5 years.  Before that, there was nothing between them. 

When you say "Before that", CGAR was only launched in May 2016...
I bought CGAR a couple of months ago. Once I feel sure it is a keeper, I will probably change to CGT. 

It was, almost exactly 6 yrs ago, and for the first year or so did slightly better than the IT in terms of price.

An oeic/ut will give a smoother ride than the equivalent IT and that's important to many people.

I prefer the ability to trade an investment when I wish at a known fixed price. 

Rollinghome

Thrugelmir said:

Rollinghome said:

aroominyork said:

Rollinghome said:

mears1 said:

The fund manager said the following two investments are similar in return and assets and both contain Index bonds, which are better than nominal bonds (not the type which are getting a negative press).

What are your thoughts & experience on the following? If they are so similar, would  you go with the one with the cheaper ongoing charge, cgar. Also, there is no stamp duty to pay and  it has the advantage of being on OEIC?

CGT return has averaged about 1.5% pa more than CGAR over last 5 years.  Before that, there was nothing between them. 

When you say "Before that", CGAR was only launched in May 2016...
I bought CGAR a couple of months ago. Once I feel sure it is a keeper, I will probably change to CGT. 

It was, almost exactly 6 yrs ago, and for the first year or so did slightly better than the IT in terms of price.

An oeic/ut will give a smoother ride than the equivalent IT and that's important to many people.

I prefer the ability to trade an investment when I wish at a known fixed price. 

I tend to as well, mostly from habit as I'd invested almost solely in stocks and ITs for the past 50 yrs and hadn't owned a single fund until post-RDR (apart from a Gartmore FTSE index tracker UT some years ago) - were far too expensive back then with huge front-end loads etc.  But I suspect that instant trading is as much a psychological benefit as real.  Many a time I've sat in front of a screen waiting to grab a price, only to find I'd have done better if I'd just had a fund sold the next day at noon.

There was a time when few people knew what you were talking about if you mentioned ITs.  Now everyone is into them, including on this board and the cab driver - with a major attraction, wide discounts, disappearing as a result.  ITs can be great investments in bull markets with closing discounts and the benefit of gearing;  not so good in falling markets, as discounts widen and  gearing magnifies the loses - as many new investors will have found.

So while I'm still mostly in ITs, with only a dozen or so individual stocks, I'm happy to give funds a look as ITs become better value.

Rollinghome

aroominyork said:

I posted this in late March 2022 after asking CG for a geographic breakdown of assets, so here it is again as it's worth seeing. nb it applied to both the IT and the OEIC.

As I'm sure you know, you will find a lot of detail on the holdings from the annual reports.  And if you are investing a serious lump, it may be worth attending the AGM.  At the CGT agm there's normally as many managers and board members as investors (possibly not unconnected with there being no lunch) and you can talk to Peter, Alastair, and Chris for as long as you like about both the fund, and the IT, or just investment in general.  All three are very generous with their knowledge.

mears1

george4064 said:

Which platform will you hold the IT or fund?

Some platforms (HL and AJBell off the top of my head, probably more) cap the platform charges for listed securities, so that might be a contributing factor to go for the IT over the OEIC fund.

Using iWeb which has a standard charge of £5 per transaction and then there will be stamp duty to pay too.

mears1

aroominyork said:

Rollinghome said:

mears1 said:

The fund manager said the following two investments are similar in return and assets and both contain Index bonds, which are better than nominal bonds (not the type which are getting a negative press).

What are your thoughts & experience on the following? If they are so similar, would  you go with the one with the cheaper ongoing charge, cgar. Also, there is no stamp duty to pay and  it has the advantage of being on OEIC?

CGT return has averaged about 1.5% pa more than CGAR over last 5 years.  Before that, there was nothing between them. 

When you say "Before that", CGAR was only launched in May 2016...
I bought CGAR a couple of months ago. Once I feel sure it is a keeper, I will probably change to CGT. 

Hi aroominyork,  I'm sure there is some profound insight to it but what's the reasoning for changing to CGT later and not buy CGT at the beginning? And what's your measure of CGAR being a keeper?

mears1

Thank you all for your input. Very educational and reassuring. Tempted to go for CGAR because of lower charge of 0.68%, no stamp duty and thanks to your explanations, I feel more comfortable with OEIC. Also, the fund man form Capital gearing who introduced me to CGAR was so helpful, so nice to speak to a real person! There are moments this DIY investing feels surreal. Apart from the latter reason, feel free to pick holes in my CGAR preference.

aroominyork

mears1 said:

aroominyork said:

Rollinghome said:

mears1 said:

The fund manager said the following two investments are similar in return and assets and both contain Index bonds, which are better than nominal bonds (not the type which are getting a negative press).

What are your thoughts & experience on the following? If they are so similar, would  you go with the one with the cheaper ongoing charge, cgar. Also, there is no stamp duty to pay and  it has the advantage of being on OEIC?

CGT return has averaged about 1.5% pa more than CGAR over last 5 years.  Before that, there was nothing between them. 

When you say "Before that", CGAR was only launched in May 2016...
I bought CGAR a couple of months ago. Once I feel sure it is a keeper, I will probably change to CGT. 

Hi aroominyork,  I'm sure there is some profound insight to it but what's the reasoning for changing to CGT later and not buy CGT at the beginning? And what's your measure of CGAR being a keeper?

It's the first wealth preservation fund I've bought (reasons discussed here) and I didn't want to pay the spread and stamp duty if I decided soon after that it was a wrong move.

Thrugelmir

mears1 said:

There are moments this DIY investing feels surreal. Apart from the latter reason, feel free to pick holes in my CGAR preference.

Why do you think that taking the DIY route is going to produce a superior return than simply opting for a broadly diversified multi asset fund. Where investment decisions such as rebalancing are taken for you. 

mears1

Thrugelmir said:

mears1 said:

There are moments this DIY investing feels surreal. Apart from the latter reason, feel free to pick holes in my CGAR preference.

Why do you think that taking the DIY route is going to produce a superior return than simply opting for a broadly diversified multi asset fund. Where investment decisions such as rebalancing are taken for you. 

Oh dear! What have I said that suggests that? It couldn't be further from the truth.   I already have a multi asset fund which is not doing as well as the trackers kindly suggested by the other posters for which I am most grateful. I am just having a go with DIY, supported by this online community who have gone out of their way to educate me.

aroominyork

Make of this what you will, but given that CGT/CGAR's equity/risk allocation has been around 40% during recent years and is overweight UK, I find VLS40 an interesting active vs. passive comparator. Part of the recent performance is of course CGT/CGAR's large holding of linkers. (Edit: just seen that over the last six months linkers generally gave up their gains from the previous six months so even more kudos to CG.)

It would take work to go further back, since CGAR only launched six years ago and CGT brought in their discount control policy around the same time, so you would have to manually chart NAV.