2 Sipp Funds Unsure about

aroominyork

dunstonh said:

aroominyork said:

dunstonh said:

And Emerging markets would be no more than around 5% for most people unless they are at the higher end of the risk scale.

Does that mean people using a global cap weighted index fund, where emerging markets constitute 10-11%, are high risk investors?

Risk can be subjective but the greater the weighting towards EM, the higher the risk of the portfolio.   100% equities with 10% EMs is typically high risk on most scales (would generally be 5/5 or 9/10)

Obviously if you have a 60/40 portfolio then 10% EM would be overweight, so it should be assessed by the proportion of equities in EMs. Would you still see >5% of equities as risky rather than good diversification?

I quite like the geographic rules of thirds: North America; Developed Europe inc. UK; Japan, Asia Pacific and EMs, though perhaps closer to a 40/30/30 split.

dunstonh

Obviously if you have a 60/40 portfolio then 10% EM would be overweight, so it should be assessed by the proportion of equities in EMs. Would you still see >5% of equities as risky rather than good diversification?

You have to look at all the assets in a portfolio.  Some will increase the risk, some will reduce.  So, with the tugging and pushing on each fund/sector/region in the portfolio, you can make minor changes or major changes.

Personally, I don't have any emerging markets in my medium-risk portfolio because if we did, we would need to increase the weightings in defence assets at the expense of developed equities.

I quite like the geographic rules of thirds: North America; Developed Europe inc. UK; Japan, Asia Pacific and EMs, though perhaps closer to a 40/30/30 split.

Structure and process. If you like it and you accept the volatility then great.

Neversurrender

I looked at the closing price of VLS 80 on January 12th 266.12

&

October 30th 237.47

I work that out as a 10.76% decrease

Is that the correct way to calculate the loss in value of a fund.

If so then technically I could sell down any fund which has lost up to 10.76% and stick the proceeds into VLS 80 and have a fighting chance of not making an actual loss?

Altior

Global funds like VLS 80 mask the true picture as they priced in GBP. There was a debate about this on another thread, but essentially if you have purchased assets in USD priced in GBP, that's part of the reason why the losses are narrower. VLS also has a domestic tilt, and the ftse 100 is one of the stronger global performers out of the significant indexes, partly because there are international large caps reporting in GBP.

Nobody knows for sure what direction fx will move in the future, if it flipped and the US$ became weak then VLS funds would show losses even if the underlying assets in USD were flat.

In a nutshell, identify the funds you like the model of, and stick with them regardless of the current pricing, as long as your risk profile can tolerate ups and downs, and they are aligned with your overall strategy. By definition, IFSL MARLBOROUGH SPECIAL SITUATIONS is out of the riskier bucket as it tries to pick big winners from small fish. It's the opposite of what VLS 80 seeks to achieve, which is more or less average performance over the longer period (albeit with the domestic tilt, and bonds thrown in).

Neversurrender

Thanks, for the explanation, I've not a clue how vls was purchased currency wise

Altior

VLS purchases trackers that track foreign equities but they are valued in GBP. For example, almost 20% of VLS 80 is the Vanguard U.S. Equity Index Fund GBP. In the source currency, this index is circa -17% over the last 365 days. In GBP, it's circa flat.

Neversurrender

I would love to know what percentage vls80 is down since jan 12th this year though

aroominyork

Neversurrender said:

I would love to know what percentage vls80 is down since jan 12th this year though

https://www2.trustnet.com/Tools/Charting.aspx
Down just under 11%

Neversurrender

aroominyork said:

Neversurrender said:

I would love to know what percentage vls80 is down since jan 12th this year though

Down just under 11%

Thanks, thats great, I had worked it out to 10.86% by looking at the closing price on jan 12th to closing price on 30th oct, and did a percentage calculation, and was hoping I had factored this the correct way...looks like I did.

Cheers for confirming

Albermarle

Neversurrender said:

aroominyork said:

Neversurrender said:

I would love to know what percentage vls80 is down since jan 12th this year though

Down just under 11%

Thanks, thats great, I had worked it out to 10.86% by looking at the closing price on jan 12th to closing price on 30th oct, and did a percentage calculation, and was hoping I had factored this the correct way...looks like I did.

Cheers for confirming

My original approx calculation seems to be wrong, and just under 11% is correct.