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Post #3 Which fund to choose? Screens attached

Babystep7
Posts: 18 Forumite

Hi all again. Following my previous post, if I decide to transfer my old pension to my current provider, here are the funds I've shortlisted that would be available. There are others available but these are multi asset. Just wanted others opinions so I know I'm thinking along the right lines. I know everyone's risk appetite is different. But I can handle fluctuations and won't be retiring for atleast 25 years. My thoughts were fund #1 and/or #2.
Thanks once again
Rich








Thanks once again
Rich








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Comments
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After a previously detailed thread, I think there's already overlong info on this thread so I'll just say that it's like an advert for L&G ( when there are plenty of other "players" which are better) ; and the O/P should just pick whatever he wants.0
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Richard1212 said:After a previously detailed thread, I think there's already overlong info on this thread so I'll just say that it's like an advert for L&G ( when there are plenty of other "players" which are better) ; and the O/P should just pick whatever he wants.0
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They are all horrible choices IMHO.
1. Called Global but it 70% UK!2. Still 30% UK, the global 70% is hedged, no point in long term hold global fund you just pay extra for it.3. Expensive for performance about the same as the benchmark 13% in France 🇫🇷 why?4. Emerging markets dabble if you want but I wouldn’t bet my retirement on them maybe max 10%. Not 33% in China 🇨🇳.
is there no simple Global tracker available?2 -
I’m all in #2 as my employer (Homeserve) uses L&G funds. I’d prefer a ftse global all cap, but hey-ho0
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MX5huggy said:They are all horrible choices IMHO.
1. Called Global but it 70% UK!2. Still 30% UK, the global 70% is hedged, no point in long term hold global fund you just pay extra for it.3. Expensive for performance about the same as the benchmark 13% in France 🇫🇷 why?4. Emerging markets dabble if you want but I wouldn’t bet my retirement on them maybe max 10%. Not 33% in China 🇨🇳.
is there no simple Global tracker available?0 -
@Babystep7 post the fund summary of the HSBC Islamic fund as you have for the other 4.Let’s check that one. Islamic funds just exclude things that are not acceptable to the teachings of the faith, not that they invest in Islamic companies exclusively.1
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MX5huggy said:@Babystep7 post the fund summary of the HSBC Islamic fund as you have for the other 4.Let’s check that one. Islamic funds just exclude things that are not acceptable to the teachings of the faith, not that they invest in Islamic companies exclusively.
Thanks
Rich0 -
Yes I would have a big chunk in that 60 to 80% it’s a bit over weight in US and therefore Tech but it’s cheapish and basically a global tracker. If the US gets the jitters it will fall but you have to hold out for the decades you plan it be invested for.0
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#1 Seems too much in UK stocks. Vanguard has a paper arguing up to 60% might be sensible, whereas an analysis in the bogleheads blog suggests 25-50% for countries with market size like Canada and UK. The 70/30 isn’t a hangin’ crime, but wouldn’t be optimal from my reading.
#2 is the closest to suitable if you value diversification (which is valuable). Vanguard’s paper showed the UK benefited least among several countries in terms of volatility reduction for funds’ prices with hedging, but that covered only the 2000-2018 period. The future will be different. There are some strong voices against currency hedging for equities, but they may have overlooked how the Japanese investor would have suffered for decades as their currency appreciated. The pound might be a different kettle of fish of course. I don’t think hedging most of the non-EM equities is criminal; and I’d guess they’ve eschewed hedging the EM ones to reduce costs.
#3 is a high cost active fund. Back away.
#4 is not diversified enough.
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MX5huggy said:Yes I would have a big chunk in that 60 to 80% it’s a bit over weight in US and therefore Tech but it’s cheapish and basically a global tracker. If the US gets the jitters it will fall but you have to hold out for the decades you plan it be invested for.
By definition, nothing that's overweight in US tech stocks can be described as 'cheapish'.
Take Tesla as an example: 12 months sales of $94bn and at $238.59 per share it's apparently worth $747bn.
Ford/GM/Stellantis/Toyota/VW/GM/BMW/Honda have sales of $1,406bn between them and their total worth is $607bn.
So according to its share price Tesla is worth more than most of the world's largest motor manufacturers combined, even though their sales are 15 times higher than Tesla.
And take Apple: at it's current share price Apple is worth over $2trillion - that's more than the entire worth of all the FTSE 100 companies combined.
These companies are priced as if they can continue to grow at their historical rates. They can't. They're already so big that they dominate the world. Unless we can find another inhabited planet nearby that's desperate for iphones and electric cars then their growth will inevitably have to stop. I'm reminded of the 'Rice and Chessboard' story, not to mention 'The Emperor's New Clothes', and something about tulip bulbs.
And it's those few overpriced tech stocks which have resulted in most of the recent gains in US and global funds which are 'a bit overweight in US tech'. Take the overpriced Facebooks and Teslas etc out of the equation and the performance would be as lacklustre as the FTSE 100 - which, with around 80% of its constituents' revenue coming from outside the UK, is pretty much a representation of the actual 'global' economy.
Long-term, despite the dire state of the UK economy, I'd prefer to have my pension invested in AstraZeneca, HSBC, Unilever, Diageo, Glencore etc, than in the US 'Magnificent Seven' which are in a bubble that will inevitably deflate, if not burst spectacularly.
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