Are the big funds all the same?

Albermarle

ChequeBookGerry said:

Dear all,

I really just don't have the time to actively monitor my pension funds so for the last few years I've got the lot (£236k) in Vanguard Life Strategy 100.  I'm happy with the equity risk profile, I understand what the fund is/does and I'm aiming to retire between 5 and 9 years from now.  I have 2x that in company pensions with a variety of suppliers so have a level of diversification there (sort of, as they'll be invested in the same sort of stocks). 

So, the question is, are all the very big, general funds really just delivering the same performance over the medium term - give or take - from what you've seen?  Ovbs you can tweak, based on included sectors, but for massive, general funds they are all the same?  (Given it's size, I'm presuming there is not a lot of point in diversifying into other funds in case they "go bust".)

Thanks.

I do not quite follow your portfolio.

I really just don't have the time to actively monitor my pension funds so for the last few years I've got the lot (£236k) in Vanguard Life Strategy 100.

But then you say ;
 I have 2x that in company pensions with a variety of suppliers so have a level of diversification there (sort of, as they'll be invested in the same sort of stocks). 

So do you have £236K X 3 ( approx) and all of it is in one kind of 100% equity fund, or another?

Or you have £236K in VLS100 in one pension you actively manage, and the other two pensions are left to their own devices/default funds ?

Or am I misunderstanding completely?

ChequeBookGerry

ChequeBookGerry said:

Just flipped £100k into HSBC FTSE all-world index tracker and that is my investing done for another year.

Hillarious.  VLS100 up 1% on yesterday and HSBC World is down the same.  

Cobbler_tone

ChequeBookGerry said:

ChequeBookGerry said:

Just flipped £100k into HSBC FTSE all-world index tracker and that is my investing done for another year.

Hillarious.  VLS100 up 1% on yesterday and HSBC World is down the same.  

I find it best that in order to sleep at night it is not advisable to look at them every day!

ChequeBookGerry

artyboy said:

ChequeBookGerry said:

artyboy said:

How exactly do you define 'massive, general fund' - I'm genuinely curious...? 

There is just so much variety out there in terms of industry, geo, asset class, and manager/management style that makes a difference to performance. So the simple answer to your question will be 'No'

I mean the funds with a value of multiple billions with a spread across different sectors.  So, for instance, I would not include a tech focused fund or a green fund.

What asset mix?
Actively managed or passive/tracker?
What geographical split?
Trad fund or ETF?

There are still a lot of dimensions with large funds, aside from industry sector or ethical considerations!

But let's just assume that with VLS100 as your starting point, you're actually targeting a low cost globally diversified equity tracker? Something that effectively gives you the same average performance as global stock markets?

Well... as already mentioned you don't exactly have one because of the VLS100 home bias. Plus the fees are a bit on the chunky side. HMWO is often mentioned as a popular option here, as it's cheap and more accurately reflects equity splits globally by overall market size. That said it's an ETF, not a trad fund, which may or may not be what you want...

Hi,

"low cost globally diversified equity tracker" is pretty much it.  I'd gone for HSBC FTSE All-World Index Fund, which has performed better than VLS100, but will now look at HMWO for the future, although I'd presume not much in it - except today of course, when I am looking....

Pat38493

ChequeBookGerry said:

artyboy said:

ChequeBookGerry said:

artyboy said:

How exactly do you define 'massive, general fund' - I'm genuinely curious...? 

There is just so much variety out there in terms of industry, geo, asset class, and manager/management style that makes a difference to performance. So the simple answer to your question will be 'No'

I mean the funds with a value of multiple billions with a spread across different sectors.  So, for instance, I would not include a tech focused fund or a green fund.

What asset mix?
Actively managed or passive/tracker?
What geographical split?
Trad fund or ETF?

There are still a lot of dimensions with large funds, aside from industry sector or ethical considerations!

But let's just assume that with VLS100 as your starting point, you're actually targeting a low cost globally diversified equity tracker? Something that effectively gives you the same average performance as global stock markets?

Well... as already mentioned you don't exactly have one because of the VLS100 home bias. Plus the fees are a bit on the chunky side. HMWO is often mentioned as a popular option here, as it's cheap and more accurately reflects equity splits globally by overall market size. That said it's an ETF, not a trad fund, which may or may not be what you want...

Hi,

"low cost globally diversified equity tracker" is pretty much it.  I'd gone for HSBC FTSE All-World Index Fund, which has performed better than VLS100, but will now look at HMWO for the future, although I'd presume not much in it - except today of course, when I am looking....

The bulk of my DC equity assets are in passive global trackers like HMWO - the general idea is to own a small piece of every company so that I don't have to worry about which sectors or countries might do better than another.  Like a couple of other posters, I don't see a reason to be overweight in UK or any other particular country for my equity investments, as I am not knowledgeable enough to guess which countries might do better than another in the future.

Be aware though - HMWO is an divesting fund so if you buy HMWO you will receive quarterly dividend payments in US Dollar.  If you want the dividends to be automatically reinvested within the fund you need HMWS which is the accumulation version of the same investment

I also have some holding in the Vanguard FTSE Global all cap fund - from what I have seen, this is the global tracker fund that has the most diversified holdings - last time I checked I think it has about 6K holdings in it.  I invested in this one just over 2 years ago and it has grown about 32% so far.  This fund includes a small amount of small cap companies whereas HMWO/HMWS doesn't.  

Also be aware that HMWS and so on are ETFs whereas VLS100 and Vanguard FTSE all Cap are funds - the main differences from an individual investor point of view seems to be that ETF are traded on the market daily so the price changes during the day, whereas funds are only valuated once per day.  This means that when you buy or sell an ETF while the relevant market is open, you know the exact deal you are getting instantly, whereas with a fund, you will get the next daily price point.

eskbanker

ChequeBookGerry said:

ChequeBookGerry said:

Just flipped £100k into HSBC FTSE all-world index tracker and that is my investing done for another year.

Hillarious.  VLS100 up 1% on yesterday and HSBC World is down the same.  

That may be down to the daily valuation points - I haven't checked those specific funds but believe that, for some funds at least, Vanguard values at 21:00 whereas HSBC is at 12:00, so the former reflects that days' US market movements, which will only be factored into the latter a day later.

Edit: HSBC FTSE All-World Index Fund Acc C up 1.25% today, likely to be corresponding to VLS100's jump yesterday....