LifeStrategy 20% Accumulation
I dripped my money into the fund slowly from around the middle of 2021 into 2022.
Since middle of 2022 my investment is sitting at around a 14% loss.
I purposely invested in this fund as it was supposed to be lower risk and 12% loss is actually quite a lot. I realise it's still early days but will it recover in the next couple of years or am I looking at 3-5 years for recovery, if it recovers at all that is?
I see that bond yields are up but the fund continues to not show any even slight signs of recovery. Is this because of high interest rates and when interest rates start to come down it will start to recover?
Even if it recovers 14%, there is still the fees on top that I have to pay so it will actually have to recover more than that just to break even.
Or its not likely to recover and I should cut my losses, transfer it to a fixed ISA where I could get a guaranteed 5.8% rate and no more fees!?
I thought a bond, once purchased, pays the stated interest no matter what, so in a fund with 80% bonds, I thought 80% of it could never go down in value. The price of new bonds can go down of course, but I thought a fund like the LS20 locked in the bonds it held.
Clearly I was wrong in that - so is the following true: investing in the LS20 is not the same as owning the bonds, it's a fund traded like anything else based on expectations of future performance? So if bond rates go down people don't want to buy the LS20, and it's price goes down. Is that right?
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