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caring

We all have to start learning at the beginning and I have looked at some very helpful sites eg Monevator but now I want to check my interpretation of chart plotting on Trustnet of actively managed high street multi fund products eg Santander atlas portfolio 7 against some passive global trackers (Hsbc Ftse 100 Index  and Vanguard’s Ftse global all cap).

  Y or N answer will be fine. An explanation will be even better!

 Even though the global trackers have a greater % growth/return (ie higher value on the Y axis), it makes no difference because the value of your fund basically depends on the price you buy and sell (minus the costs).           Y/N?

 The high street fund’s performance seems to follow the same trend as the global trackers even though it is actively managed but basically consists of a basket of index funds?   Y/N

 So, given the multi fund’s and global trackers’ performance are the same, the multi fund at an ongoing charge of  0.56% costs more to hold than the trackers at 0.13%(hsbc) and ) 0.22% (Vanguards)?   Y/N?

 

   

InvesterJones

Replies in line

caring said:We all have to start learning at the beginning and I have looked at some very helpful sites eg Monevator but now I want to check my interpretation of chart plotting on Trustnet of actively managed high street multi fund products eg Santander atlas portfolio 7 against some passive global trackers (Hsbc Ftse 100 Index  and Vanguard’s Ftse global all cap).

  Y or N answer will be fine. An explanation will be even better!

 Even though the global trackers have a greater % growth/return (ie higher value on the Y axis), it makes no difference because the value of your fund basically depends on the price you buy and sell (minus the costs).           Y/N?

Incorrect. While yes, the value of your return does depend on the price you buy and sell, the % return takes account of the price you are buying - simply put if a fund has grown by 5 % in the last year then whatever price you paid at the start of the year is now worth 5% more. Of course, past performance is no guarantee of future etc.

 The high street fund’s performance seems to follow the same trend as the global trackers even though it is actively managed but basically consists of a basket of index funds?   Y/N

I haven't seen your plot so can't confirm, but yes, one can generally expect the same trends in diverse funds.

 So, given the multi fund’s and global trackers’ performance are the same, the multi fund at an ongoing charge of  0.56% costs more to hold than the trackers at 0.13%(hsbc) and ) 0.22% (Vanguards)?   Y/N?

Your assertion that their performance is the same doesn't fit with your earlier assertion that the global trackers have a greater return. Greater return = greater performance. Returns already take account of ongoing fund charges, which might account for some of the difference in performance.

Remember, trend means they are going in roughly the same direction. Performance/return is how much they move.

dunstonh

 Even though the global trackers have a greater % growth/return (ie higher value on the Y axis), it makes no difference because the value of your fund basically depends on the price you buy and sell (minus the costs).           Y/N?

Historic returns are no indication of what future returns will be.    In a period when the FTSE100 is best, it will be higher than global equity and vice versa.  When putting multiple funds on a returns graph, they will all have the same start and end date.  So, that would be the return of each of those funds in that period.

 The high street fund’s performance seems to follow the same trend as the global trackers even though it is actively managed but basically consists of a basket of index funds?   Y/N

No.  Whilst the multi-asset fund will have an element of global exposure and that part will trend the same, it will also have assets within it that are nothing to do with global equity.  And those could trend in a completely different way.

 So, given the multi fund’s and global trackers’ performance are the same, the multi fund at an ongoing charge of  0.56% costs more to hold than the trackers at 0.13%(hsbc) and ) 0.22% (Vanguards)?   Y/N?

They are not the same.    The Santander fund probably isnt a good example as its an expensive multi-asset fund.

A multi-asset fund will be more expensive than holding the trackers directly as the multi-asset fund carries out rebalancing. if you hold the trackers directly, you will need to manually rebalance.    

A global tracker is going to be higher risk than the majority of mulit-asset funds.