Bombed-out funds 6 February at 1:31PM edited 6 February at 1:36PM in Savings & investments 7 replies 722 views

hallmark

Out of curiosity, does anybody here run a portfolio of bombed-out funds (whether shares, bonds or others)?  I.e. deliberately targeting those that have performed badly over the previous year/years?  If so how has it worked for you?

It's something I'm fairly strongly considering on a modest basis and with money I could afford to risk performing poorly. This would be with the intention to buy and hold forever.  Funds as opposed to individual shares as too many bombed out shares go to zero, far less funds collapse (although some do obviously).

wmb194

hallmark said:

Out of curiosity, does anybody here run a portfolio of bombed-out funds (whether shares, bonds or others)?  I.e. deliberately targeting those that have performed badly over the previous year/years?  If so how has it worked for you?

It's something I'm fairly strongly considering on a modest basis and with money I could afford to risk performing poorly. This would be with the intention to buy and hold forever.  Funds as opposed to individual shares as too many bombed out shares go to zero, far less funds collapse (although some do obviously).

*fewer funds. It's not really something you need to ask random people about as you can backtest the theory by picking bombed out funds from a few years ago and seeing how they've subsequently performed.

DireEmblem

Have you considered Investment Trusts?  They generally appear to over/understate the market.  There is no guarantee the discount/premium will change in your favour, but if you could buy something say 10%+ cheaper and are willing to hold for a long period, why wouldn't you?

Prism

I love a decent investment trust at a discount. I have a few that have fallen around 50% over the last year since I have bought them - I generally top them up at the lower price. Unless there is something fundamentally wrong with the trust then they usually recover at some point and provide good returns.

DireEmblem

Check out CHRY what happened a few months back to now.

There are others as well.  Not saying it’s great or they all are but intend to find if the track record is good you buy at a discount to NAV when the market wobbles.

Albermarle

DireEmblem said:

Have you considered Investment Trusts?  They generally appear to over/understate the market.  There is no guarantee the discount/premium will change in your favour, but if you could buy something say 10%+ cheaper and are willing to hold for a long period, why wouldn't you?

I believe that some investors study this area quite closely and are regular traders of IT's where they feel the discount has moved too far down.
When markets drop quickly, IT's seem to drop even further and the discount increases, creating an opportunity if you are quick/brave enough.

eastmidsaver

at the weekend i used some of my spare cash to buy more of my baillie gifford fund,  which massively dropped over 2022.
wish i'd done it a few weeks ago when prices were even lower,  but couldn't do it at the time.
but i am holding for long term so am comfortable buying more.

jimjames

PIN is still on a 42% discount, most valuations for the portfolio are at the end of last year so taken into account the market drops. Private equity is still not loved by the market.