Safe Funds with good returns

investor23

Hello,

My savings have been in the Vanguard FTSE Global Cap Index for about a year now and the gain is not great (sits around 5%) compared to my pension in the HL growth fund (between 10%-18%). I use Hargreaves Landsdown to invest and have about £17,000 in savings. My question is would it be a good idea to sell the shares in my Fund and Share account (the Vanguard it is current invested in) and buy stocks in the HL growth fund instead? This is a shorter term investment between 5-10 years. Is there any good funds that i can look into or recommended. Does the above sound a good idea? 

Thank you: )

investor23

I am aware there is no safe funds. Wrong term of phrase. I am just looking for some names of less risky funds for a 5-10 investment that i can do further research in. 

dunstonh

My savings have been in the Vanguard FTSE Global Cap Index for about a year now and the gain is not great (sits around 5%) compared to my pension in the HL growth fund (between 10%-18%).

Have you got that back to front? Vanguard is the better performer over 1 year:



Its also better over 3 years:

My question is would it be a good idea to sell the shares in my Fund and Share account (the Vanguard it is current invested in) and buy stocks in the HL growth fund instead? 

So, you are asking i you should take it out of the cheaper and better performer to put it in the more expensive fund that isn't as good?

I am aware there is no safe funds. Wrong term of phrase. I am just looking for some names of less risky funds for a 5-10 investment that i can do further research in. 

You need to define what safe means to you as 100% equities puts you at the upper end of the conventional risk scale (in isolation of other savings/assets)

investor23

My pension from a previous employer is in a SIPP, which is the HL Growth fund, which the gains made are the 17.01% shown below. The 4.74% is the gains made in the my Vanguard FTSE Global All Cap Index via my fund and share account. Big difference? Which is why i am considering putting it in the HL instead? I may be missing something here so please enlighten me but when i see the gains on both of these it would make sense to put it in the Growth fund instead?

eskbanker

investor23 said:

My pension from a previous employer is in a SIPP, which is the HL Growth fund, which the gains made are the 17.01% shown below. The 4.74% is the gains made in the my Vanguard FTSE Global All Cap Index via my fund and share account. Big difference? Which is why i am considering putting it in the HL instead? I may be missing something here so please enlighten me but when i see the gains on both of these it would make sense to put it in the Growth fund instead?

If you're going to be so selective when sharing heavily redacted data, it'll be impossible to identify what it is you're missing, but the previous post clearly demonstrated objectively that the Vanguard fund outperformed the HL one over all recent reporting periods, so options would include you identifying the wrong funds, or using figures that aren't like-for-like (e.g. not allowing for contributions that weren't in place for the full year, etc), or different periods, or some quirks of HL's annualising algorithms, or different charges taken into account, etc, etc, but it's just a guess without more data to go on.

As a wider point, it's rarely a good idea to change holdings simply on the basis of comparative recent performance, you should take a more strategic view about the fundamentals of which investments best fit your objectives....

masonic

Looks like the priority for you to work on is general understanding of investments and returns. If you have underperformed your own investments by nearly 20% in a year, then that is a you problem, not an investment problem. You need to figure out why you were unable to achieve the return that someone else investing in the fund over a year would have. Reasons could include, misinterpreting the performance data (so your actual return is not what you think it is), not investing over the whole period (timing the market or adding money part way through the period), switching between investments (buy high sell low).

Based on the data presented in this thread, you should seriously consider dropping the expensive HL fund, if anything.

As for low risk high return funds, they don't exist, if you are offered one then it is likely a scam.

Alexland

I expect those performance numbers are somehow based on your individual dates of contribution into each account etc rather than the performance of the funds which would of course be the same for everyone. IMHO the Vanguard fund is a clearly a better fund (although I prefer others) and also happens to have performed better in almost any measurement period (although that shouldn't be the basis for choosing a fund). I wouldn't touch the HL fund with a barge pole as there is no shortage of better funds.

Beddie

 Vanguard FTSE Global Cap Index is fine - but it is 100% shares, so is higher risk than a managed fund. But I'm sure you already know that.

If you wanted to reduce risk you could use Vanguard Lifestrategy or HSBC Global Strategy funds, which both offer varying levels of risk so you can choose the one that works for you. Many other choices too, but these are worth looking at to give you an idea. 

https://www.assetmanagement.hsbc.co.uk/en/intermediary/capabilities/multi-asset/hsbc-global-strategy-portfolios

eskbanker

Beddie said:

 Vanguard FTSE Global Cap Index is fine - but it is 100% shares, so is higher risk than a managed fund. But I'm sure you already know that.

I don't follow that logic - 100% equities is obviously at the high end of the risk scale but many managed funds are also there, so the more obvious comparator would be multi-asset funds or portfolios rather than management style as such.

Eyeful

Your post suggests that you are new to investing, so I will make this simple.

1.  Academic research repeatedly shows that after charges are applied, most active fund manager fail to bet a simple Major World Index. So you will do better than most active funds by picking a
low cost passive fund that tracks a  MAJOR WORLD INDEX.

2. I believe you will better off, holding only the Vanguard FTSE Global Cap Index Fund.
(a) Over the last 5 years,  dunstoh's chart shows the Vanguard Fund has out performed the HL Fund. 
(b) Using the cost section of HL website to compare both funds:
£5000 within a S&S ISA over 5 years, assuming 4% growth for both funds, shows that you would be better off with the the Vanguard fund after charges by £249..
Vanguard= £6140.27.after charges
HL Growth= £5890.86 after charges


3. You are comparing apples with oranges.
Your Vanguard is 100% in shares. so more risky.
Your HL Growth is a Multi- Asset Fund with a share /bond split of about 80% in share % & 20% in bonds.

4. You should be comparing your HL Growth Fund against the Vanguard Life Strategy 80 Fund (see my later post).

                                

Eyeful

If you do want to think of Low cost Multi Asset Funds:
(a) Read this: https://monevator.com/passive-fund-of-funds-the-rivals/

(b) Watch this:
https://www.youtube.com/watch?v=lGQ9KyQq8Jw