Fund of Funds II
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Hi darkpool,
Please don't take this the wrong way as I mean no offence. I find it very tiresome reading your constant attacks against the IFA's etc, I'm all for you having your view but couldn't you just put something in your 'signature' rather than repeating the same message on so many otherwise useful posts?
Best Wishes,
Mickey
fair enough, but there are a lot of IFAs on this board giving out pro IFA propaganda..... it seems a public duty to try and put an opposing viewpoint.
i've only started two recent threads, however it seems a lot of the normal consumers on this site share my concerns about the value that IFAs provide. i can't be held responsible that others see things in a similar way to myself and wish to post.
i'm honestly not going to be offended if you, or anyone else, puts me on ignore.0 -
Was it a public duty to call investors in active funds "'tards" like you did in the first version of this thread?fair enough, but there are a lot of IFAs on this board giving out pro IFA propaganda..... it seems a public duty to try and put an opposing viewpoint.
i've only started two recent threads, however it seems a lot of the normal consumers on this site share my concerns about the value that IFAs provide. i can't be held responsible that others see things in a similar way to myself and wish to post.
i'm honestly not going to be offended if you, or anyone else, puts me on ignore.
The fact that you were so insulting in that post completely ruins any claim that you were doing this out of a sense of decency.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Was it a public duty to call investors in active funds "'tards" like you did in the first version of this thread?
The fact that you were so insulting in that post completely ruins any claim that you were doing this out of a sense of decency.
well, the way i see it if calling someone a "'tard" makes them consider the optimum way of investing money it might be worthwhile.
or if you find that insulting i'll change it to "i believe that UT investors lack the understanding of fund fees to realise that they have bought a sub optimal investment".
happy with that?
I should thank you IFAs though. I used to believe in an efficient market etc, then i realised that it couldn't really be efficient (in some aspects) since so many investors had an incentive to take excessive risk...... it's something i try my utmost to exploit.0 -
psychic_teabag wrote: »What's the feeling on fund-of-trackers, where a manager would actively allocate between trackers ? I noticed an advert in the paper today for Fidelity Moneybuilder Asset Allocator, which sounds like such a thing, though with not enough history to gauge performance. TER is 0.92%. Not sure if Cavendish would refund anything (they have AMC as 1.25% with 0.5% refunded).
EDIT: HL lists the TER as 1.17% - Fidelity's 0.92% was an estimate at launch ?
Am I right in thinking the TCF funds are similar sorts of beasts ?
This should differ from things like the Vanguard lifestrategy funds which use fixed allocations (but lower costs).
Personally I find the concept of choosing a manager to actively manage a selection of passive funds counter-intuitive. As the objective would be outperformance relative to an average benchmark, I would have thought that any criteria and arguments put forward for the ability of a fund manager to put together a fund of active funds to outperform a benchmark index would also apply to the selection of passive index funds. Unless I am missing something obvious here, the only benefit would be the annual cost of a fund of trackers should be lower than that of a fund of funds. But for investors who prefer passive index investment at lower cost rather than active fund management at higher cost on the basis that choosing the latter is a bit of a lottery (BTW: not trying to argue the active: passive debate here though), choosing active management of a fund of passive trackers seems very much a contradiction in terms.
The asset allocation in the Fidelity MAMMB portfolio does not inspire me with much confidence even if it were a passive index allocation, but particularly if this is supposed to be an actively managed fund of trackers. Having said that I am not familiar with the allocation: 20% BofAML Sterling Large Capital TR EUR, no idea what that is supposed to be.
https://www.fidelity.co.uk/investor/research-funds/fund-supermarket/factsheet/summary.page?idtype=ISIN&fundid=GB00B6ZGM421&UseProxy=Yes&fundname=Fidelity%20Multi%20Asset%20Allocator%20Balanced%20MoneyBuilder
I think the TCF funds are similar to the Vanguard lifestyle in approach though not "totally clear" funds (=TCF), as the fund allocation is not described sufficiently for the four funds they have at present. Also, personally I am not too keen on a few of the tracker selections in the funds. Fact sheets here:
http://www.tcfinvestment.com/content/fact-sheets-0
JamesU0 -
You do realise those actions and your motivation which is the efficient market. You either fail or profit, collectively these actions form the marketit's something i try my utmost to exploit.
http://www.youtube.com/watch?v=y6223BscVsg
The problem is right now, people have their shades on and are vehemently arguing its night time. It has to be, its dark outside.
If you obstruct profit or losses then you create a failing market, its the fallacies which lead people to believe 'we have to do this' which is inefficient.
Nothing changed otherwise, just same old human stupidity it was always there0 -
I sold my FTSE 100 ETF (ISF.L) in my Hargreaves Lansdown SIPP and reinvested the proceeds in the HL Multi-Manager Income & Growth Trust Accumulation Units.
Seems a reasonable diversification from my High Yield Portfolio of shares held in my SIPPDEAL SIPP (which is 10x larger than my HL SIPP).
No new monies going into either.
I (and my employer) am contributing into a Friends Provident stakeholder via salary sacrifice and we get half the employer's NI saving too, 100% into FP BlackRock (40:60) Gl Eq Idx (Aq HP). My contributions for 2011 went into FP BlackRock (50:50) Gl Eq Idx (Aq HP) so going less UK for 2012. It seems to levy a 0.5% AMC via unit cancellation, so I presume these two funds have a zero AMC even though the documents state a 1% fee. Hopefully this doesn't mean a total AMC of 1.5% for this stakeholder!
I wonder what 'Aquila HP' means in the name of these funds!0 -
sabretoothtigger wrote: »You do realise those actions and your motivation which is the efficient market. You either fail or profit, collectively these actions form the market
until fairly recently i believed the whole "all known information is reflected in the price" routine.
but then i got thinking, that only really works when the whole market is driven by individuals investing their own money. we know this is not the case, most shares are owned by institutions.
hedge fund managers get 20% of any profit, so it means it's rational for a hedge manager to make high risk investments (if he wins he gets 20%, if he loses he doesn't care). so it makes more sense for him to make high risk investments as opposed to safe investments even though the risk/ rewards might favour the safe investment.
some of us will remember the tech bubble in 1999. even at the time it was obvious a lot of these shares trading on 100 times revenue were worthless, but it was rational for fund managers to go with flow and ignore whatt common sense said.0 -
Personally I find the concept of choosing a manager to actively manage a selection of passive funds counter-intuitive. As the objective would be outperformance relative to an average benchmark, I would have thought that any criteria and arguments put forward for the ability of a fund manager to put together a fund of active funds to outperform a benchmark index would also apply to the selection of passive index funds.
My (perhaps naive) thinking was along the lines that the manager would be taking the role of worrying about allocation across asset classes and geographies. Ideally, reduce holding of one of the trackers when that economy looked set to crash, or loading up just afterwards when a sector looked cheap.
As opposed to just rebalancing a the trackers as they deviate from static allocations.0 -
hedge fund managers get 20% of any profit, so it means it's rational for a hedge manager to make high risk investments (if he wins he gets 20%, if he loses he doesn't care). so it makes more sense for him to make high risk investments as opposed to safe investments even though the risk/ rewards might favour the safe investment.
some of us will remember the tech bubble in 1999
To hedge fund economies of scale apply. Yes he gets 20% but he needs the funds invested and for that he needs to deliver performance.
The greater the funds the higher his pay even at a high percentage he has to be of more benefit to his customers then competitively available elsewhere.
It is high risk though but then they can write losses against their high taxes
The tech bubble corrected and in 97 or so it was in decline but was affected by the fed lowering its rates apparently.
It is not a natural market when money is provided at a loss for investment. In USA people could till recently fix a mortgage for 25 years at 3%, which is the same as government.
Deliberate loss making and distortion is inefficient but it comes from the force of politics rather then free markets where people are always trying to cut a better deal then someone else0 -
psychic_teabag wrote: »My (perhaps naive) thinking was along the lines that the manager would be taking the role of worrying about allocation across asset classes and geographies. Ideally, reduce holding of one of the trackers when that economy looked set to crash, or loading up just afterwards when a sector looked cheap. As opposed to just rebalancing a the trackers as they deviate from static allocations.
Sounds ideal if a manager can be found that meet those criteria. But they do seem to struggle during such volatility, and maybe reducing downside at expense of upside or vice-versa during corrections, tall order to do both perhaps. Managers also seem to have difficulty consistently outperforming benchmark, taking multi-asset funds for example, maybe 3-5 funds have managed to do this consistently over the last five years. So assuming there were enough funds of trackers available, how to choose a manager that has the potential to consistently outperform the benchmark, which in this case would be the fixed asset allocation which is auto-rebalanced.
JamesU0
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