De-risking

Hoenir

Sarahspangles said:

Hoenir said:

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

Yields are always based on historic data , i.e. actual payouts, not forecast. If interest rates have been falling, as is the case, then future payout's will be lower and correspondingly the real yield as at the date of purchase. 

Yes, though I’ve been surprised that the initial impact of interest rate changes is not yet showing in the graphs.

Remember that interest earnt/accrued by the fund is reflected in the unit price. When you buy units the price will include an element of income that you'll be subsequently paid back at the next distribution date. Cleanest way of buying cash or cash like investments is when they go ex-div. 

tigerspill

SVaz said:

I’ve got 3 years in a short term money market fund for 2027+ and I’m about to set up 2 years in a Gilt ladder starting in 2030. 

It’s costing me £14k to get £9k + £9k and if interest rates ( for the coupons) are higher than 2% then I’ll have a bit more.    

If you don't mind me asking - which MM fund are you in?
Thanks

SVaz

Royal London Short term

Cus

Roger175 said:

saucer said:

Roger175 said:

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

For very depressing reasons though

Indeed, and fully accepted. I hold a large basket of shares and do sometimes struggle with the ethical side of things, then again, anyone holding a UK equity fund will also be holding them, they just don't see the name so prominently.

I find this a tough one. I find it easy to choose ethically farmed food even though it is more expensive, buy clothes that aren't made by 6 year olds somewhere abroad etc etc, but when it comes to investing in passive index trackers I just close my mind to the amount I am actually investing in companies that I think are unethical. Can't trust ethical funds as they look a bit of sham, and people think you are daft to take lower returns. Difficult one.  They should do a pick and mix passive tracker where you drag and drop the companies you want into it

poseidon1

MarkCarnage said:

SteveBLFC64 said:

Does anyone use funds similar to below as part of their method of de-risking - on the surface it almost appears to be too good to be true - yield of 7.58, low risk and fairly consistent growth over the past few years. I'm sure I'm missing something..... ?

Default risk of individual holdings is probably not insignificant at times...particularly if we have a recession. Also, this won't perform as well in a falling interest rate environment....unsurprisingly it's done ok over the last couple of years in a generally rising rate backdrop. Holding some of it is probably a reasonable source of additional yield and a diversifier of fixed rate risk, but I wouldn't put all my credit exposure in there. 

I was intrigued at such a high yield for an M & G fund ( although I have a couple of other funds at the same or higher yield).

However, when looking at the geographical split, was somewhat put off by the high allocation to Italian debt ( 36%). Since Italian companies tend to carry a higher average level of leveraged debt compared to companies in other major euro zone countries, this seems to be towards the upper end of the risk spectrum even within the high yield bond universe.  At best I would see it as worth a punt, but not really in the  'buy and forget ' category from my perspective.

cfw1994

Cus said:

Roger175 said:

saucer said:

Roger175 said:

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

For very depressing reasons though

Indeed, and fully accepted. I hold a large basket of shares and do sometimes struggle with the ethical side of things, then again, anyone holding a UK equity fund will also be holding them, they just don't see the name so prominently.

I find this a tough one. I find it easy to choose ethically farmed food even though it is more expensive, buy clothes that aren't made by 6 year olds somewhere abroad etc etc, but when it comes to investing in passive index trackers I just close my mind to the amount I am actually investing in companies that I think are unethical. Can't trust ethical funds as they look a bit of sham, and people think you are daft to take lower returns. Difficult one.  They should do a pick and mix passive tracker where you drag and drop the companies you want into it

Well, nothing to stop you using T212/AJbell/HL etc & picking your own companies…..it won’t be a tracker, but then, a pick+mix will never be a tracker!!

It is a tough one, & I have just learned to accept that whilst I do have some level of personal morals, it clearly gets skewed a bit when it comes to money &B-road investment strategies 🙄

Cus

cfw1994 said:

Cus said:

Roger175 said:

saucer said:

Roger175 said:

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

For very depressing reasons though

Indeed, and fully accepted. I hold a large basket of shares and do sometimes struggle with the ethical side of things, then again, anyone holding a UK equity fund will also be holding them, they just don't see the name so prominently.

I find this a tough one. I find it easy to choose ethically farmed food even though it is more expensive, buy clothes that aren't made by 6 year olds somewhere abroad etc etc, but when it comes to investing in passive index trackers I just close my mind to the amount I am actually investing in companies that I think are unethical. Can't trust ethical funds as they look a bit of sham, and people think you are daft to take lower returns. Difficult one.  They should do a pick and mix passive tracker where you drag and drop the companies you want into it

Well, nothing to stop you using T212/AJbell/HL etc & picking your own companies…..it won’t be a tracker, but then, a pick+mix will never be a tracker!!

It is a tough one, & I have just learned to accept that whilst I do have some level of personal morals, it clearly gets skewed a bit when it comes to money &B-road investment strategies 🙄

I think using a platform to pick your own 3000 global companies and intentionally leaving out say 500, and when picking them ensuring that that your investment is market cap weighted, and then manually adjusting that regularly to maintain those weightings is beyond my capacity.  But it would be a tracker

Secret2ndAccount

Cus said:

... They should do a pick and mix passive tracker where you drag and drop the companies you want into it

Blackrock was working on this a couple of years ago. The idea was to start with the index of your choice, then unclick the compnies you wanted to skip. That was when the woke movement was in full swing though. I suspect it has moved to the back burner now.

Charles Schwab offers something. Google: Schwab direct investing          I have seen reviews saying it doesn't live up to the billing though.

saucer

saucer said:

artyboy said:

GazzaBloom said:

cfw1994 said:

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

I think you're right....not too many years ago (3?), most cash/MMF were languishing around 0-0.5% !

Prior to the era of QE post 2008, an interest rate of 5-6% was typical, higher in some decades prior.

I can't see rates going back to the 0.somethings anytime soon, if ever again.

Current geopolitics could have us back into double digits before you know it...

We’re in a similar situation to lots on here. I’m 58 and we’re both planning on retiring next year. We in the very fortunate position of having good DB pensions and are due full state pensions. We also sold a BTL flat a couple of years so have been drip feeding cash into SIPPs and ISAs. 

I think what has unsettled me and made me run to safety is the scary administration across the pond. Who knows what troubles they are going to bring. So much so that we’re almost completely now in cash/STMM funds. 

We could afford to get back into investment funds and I’m considering a global tracker e.g. HSBC MSCI with the bit of our private funds we could afford to take risks with. The downside is it focuses us even more on the geopolitical issues that we are all facing. Maybe leaving everything in funds that are so far outpacing inflation is the smarter (if less adventurous) move. Who knows.

After this we got back into stocks via a MSCI global fund. Luckily only a relatively small portion of our overall assets but…Kind of wish we hadn’t 

saucer

cfw1994 said:

If you can’t emotionally weather a crash now, then drop a chunk of your funds into the MMF.  Sleep easier.

If markets drop 10%, buy back in with some of it.
If they drop another 10%, repeat.

🤷‍♂️

Now’s your chance…