Should I stick with this ISA fund?

Albermarle

Funds should be assessed against a suitable benchmark

Identifying a suitable benchmark, is less than an exact science to say the least. 

OP - A halfway house is to keep the fund, but put new contributions into a different investments to get some more diversification.

NoviceInvestor1

A good starting point is the sector or factor they are betting on.

Things like Fundsmith, LT etc are betting on quality stocks only. So I'd like to see how they do against simply buying the MSCI World Quality.

Same goes for value funds, if they are betting on just Value factor and excluding the rest of the MSCI ACWI/World investable companies then I'd want to see how they are doing versus just buying a Value factor tracker.

I will always take the funds own benchmark with a massive pinch of salt. They cheat - funds with 100% equity risk who benchmark against the SONIA rate or funds with 80% tech exposure benchmarking themselves vs IA Global.

Nick Train is a benchmark cheat as it happens, using GILTS as a benchmark for an equity portfolio and helping himself to £14.5mn of performance fees as a result. 

Prism

NoviceInvestor1 said:

I will always take the funds own benchmark with a massive pinch of salt. They cheat - funds with 100% equity risk who benchmark against the SONIA rate or funds with 80% tech exposure benchmarking themselves vs IA Global.

Nick Train is a benchmark cheat as it happens, using GILTS as a benchmark for an equity portfolio and helping himself to £14.5mn of performance fees as a result. 

I'm not sure which fund you are looking at but the global fund is benchmarked against MCSI World and the UK funds against the FTSE all share - both of which seem appropriate.

Prism

bostonerimus said:

I would never invest in an actively managed fund with such a small number of holdings as Lindsell Train Global Equity Fund.

Well if you are going for an active fund you may as well go 'active'. That usually means relatively few holdings. Otherwise you tend to get an expensive tracker.

Albermarle

Prism said:

bostonerimus said:

I would never invest in an actively managed fund with such a small number of holdings as Lindsell Train Global Equity Fund.

Well if you are going for an active fund you may as well go 'active'. That usually means relatively few holdings. Otherwise you tend to get an expensive tracker.

I agree with this.  I had a couple of managed funds, that I realised were really just expensive trackers.
I have a couple of other managed funds ( as satellites)that are betting on certain choices . One has done well, and one not so well, which I suppose is to be expected.

NoviceInvestor1

Prism said:

NoviceInvestor1 said:

I will always take the funds own benchmark with a massive pinch of salt. They cheat - funds with 100% equity risk who benchmark against the SONIA rate or funds with 80% tech exposure benchmarking themselves vs IA Global.

Nick Train is a benchmark cheat as it happens, using GILTS as a benchmark for an equity portfolio and helping himself to £14.5mn of performance fees as a result. 

I'm not sure which fund you are looking at but the global fund is benchmarked against MCSI World and the UK funds against the FTSE all share - both of which seem appropriate.

Lindsell Train Investment Trust

https://portfolio-adviser.com/lindsell-train-bagged-14-5m-of-performance-fees-with-gilt-benchmark/

Prism

NoviceInvestor1 said:

Prism said:

NoviceInvestor1 said:

I will always take the funds own benchmark with a massive pinch of salt. They cheat - funds with 100% equity risk who benchmark against the SONIA rate or funds with 80% tech exposure benchmarking themselves vs IA Global.

Nick Train is a benchmark cheat as it happens, using GILTS as a benchmark for an equity portfolio and helping himself to £14.5mn of performance fees as a result. 

I'm not sure which fund you are looking at but the global fund is benchmarked against MCSI World and the UK funds against the FTSE all share - both of which seem appropriate.

Lindsell Train Investment Trust

https://portfolio-adviser.com/lindsell-train-bagged-14-5m-of-performance-fees-with-gilt-benchmark/

Ah, I see. That's not the fund being discussed in this thread though. Not a big fan of performance fees but if they pay for themselves I suppose it doesn't really matter what the benchmark is.

The benchmark for that trust is also MSCI World, for comparison purposes.

NoviceInvestor1

I understand that's not the fund that is being discussed, it was a general point about finding a suitable benchmark to compare performance to......

The fact the manager of the fund being discussed also runs an investment trust that has been completely disingenuously using GILTs as a benchmark for a 100% equity offering is I suppose relevant to the conversation somewhat too though.

It's a complete lack of integrity, and one of many reasons I wouldn't contemplate investing in any of his funds (regardless of the fact that after shareholder pressure they were forced to change it).

Prism

NoviceInvestor1 said:

I understand that's not the fund that is being discussed, it was a general point about finding a suitable benchmark to compare performance to......

The fact the manager of the fund being discussed also runs an investment trust that has been completely disingenuously using GILTs as a benchmark for a 100% equity offering is I suppose relevant to the conversation somewhat too though.

It's a complete lack of integrity, and one of many reasons I wouldn't contemplate investing in any of his funds (regardless of the fact that after shareholder pressure they were forced to change it).

That investment trust is benchmarked against MSCI World for all performance comparisons, and has been for many years. There happens to be an odd performance fee calculation based on Gilts but that is not relevant to what I assume we are talking about, which is comparisons of funds using historical performance. There are quite a few trusts around with complex and unusual performance fees but that doesn't mean that they use them as a benchmark.

bostonerimus

Prism said:

bostonerimus said:

I would never invest in an actively managed fund with such a small number of holdings as Lindsell Train Global Equity Fund.

Well if you are going for an active fund you may as well go 'active'. That usually means relatively few holdings. Otherwise you tend to get an expensive tracker.

Buying 25 equity stocks is a bit thin on the ground to me. If I'm going to pay for some strategy then I'd want something more like an investment trust. The one active fund I own is a multi-asset income fund with 1200 bonds and 65 dividend stocks.