Investments

Hello
we had a review of my mums (who is 70) investments from an FA as they are abit all over the place and we just want a one stop shop.
On the risk scale she is 5/10, looking for slow & steady growth over 10 years no income.
Advice we have received is for the fidelity multi asset allocator defensive fund (80% bonds, 20% equities ).
would appreciate your market views on investing in 80% bonds given above profile …and will bonds do better over this time horizon?

thank you !
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  • eskbanker
    eskbanker Posts: 29,836
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    poli123 said:
    Hello
    we had a review of my mums (who is 70) investments from an FA as they are abit all over the place and we just want a one stop shop.
    On the risk scale she is 5/10, looking for slow & steady growth over 10 years no income.
    Advice we have received is for the fidelity multi asset allocator defensive fund (80% bonds, 20% equities ).
    would appreciate your market views on investing in 80% bonds given above profile …and will bonds do better over this time horizon?

    thank you !
    Despite the turmoil of the past year or two, bonds have traditionally been better than other instruments for delivering slow and steady growth, but of course there are no guarantees.  However, the wider question is why would random anonymous internet strangers be able to offer better ideas from small scraps of data than a professional adviser with sight of the full file?
  • poli123
    poli123 Posts: 36
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    The advice is from a restricted adviser so hence my question . 
  • fjh
    fjh Posts: 182
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    poli123 said:
    The advice is from a restricted adviser so hence my question . 
    So why not go to an IFA?
  • Long story it was my mums choice not mine .
  • masonic
    masonic Posts: 22,844
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    poli123 said:
    The advice is from a restricted adviser so hence my question . 
    This fund features in Monevator's excellent comparison of the best multi-asset funds, and is relatively inexpensive. It would tick all of my boxes. Going for Defensive (20/80) rather than Strategic (40/60) seems a bit odd given the 5/10 risk tolerance, but the adviser would understand the circumstances in more detail than a number would provide us. A restricted adviser should be trustworthy on the basis of asset allocation. There's just a risk that they will opt for a lower-quality and/or more expensive 'house' offering, but in this case it doesn't appear they have.
  • Hoenir
    Hoenir Posts: 1,187
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    If steady growth and a low risk of volatility is the objective. Then 80/20 is in the right ball park.  Not so much a question of whether bonds will provide a better return but the fact that equities could potentially take a sharp sudden drop at any time. Growth isn't linear. Will be akin to a rollercoaster with a series of peaks and troughs. 
  • Albermarle
    Albermarle Posts: 21,085
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    Going for Defensive (20/80) rather than Strategic (40/60) seems a bit odd given the 5/10 risk tolerance, 

    That was my thought as well. Although the data sheets of both say they are a 4 out of 7 risk rating. Although we all know risk rating is not an exact science.

  • poli123
    poli123 Posts: 36
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    Thank you for your comments . Some background she has 31% of her holdings in the fidelity strategic fund , 50 % in tracker funds and balance in the hsbc global balanced -all over the place so hence needed for a review. In summary will ask the advisor for her rationale.

  • masonic
    masonic Posts: 22,844
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    edited 10 December 2023 at 8:08PM
    Sounds like she has quite a bit more risk in her current holdings (about ~70% equities if I understand your description correctly). There isn't really any need to have multiple different funds for this sort of portfolio, so consolidating into one multi-asset fund will simplify things without any great loss of diversity. A reduction in risk could be sensible at this juncture, especially if there is no need to take risk and/or the assets are being preserved as a legacy (and therefore may need to be sold at short notice at some unknown point in the future).
  • poli123
    poli123 Posts: 36
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    masonic said:
    Sounds like she has quite a bit more risk in her current holdings (about ~70% equities if I understand your description correctly). There isn't really any need to have multiple different funds for this sort of portfolio, so consolidating into one multi-asset fund will simplify things without any great loss of diversity. A reduction in risk could be sensible at this juncture, especially if there is no need to take risk and/or the assets are being preserved as a legacy (and therefore may need to be sold at short notice at some unknown point in the future).
    Agreed a single multi asset fund is definitely more sensible and hence we requested a review and received the advice for a 80/20 Fund..
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