Looking to review holdings
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3% of original pot drawdown inflation adjusted with that portfolio seems reasonable to me.
I appreciate we are in a period now of lower returns....perhaps for some time.....
......but if the funds are averaging 6.5% ps, and costs/fees are under 1%, presumably a 3% draw should be VERY comfortable, right?!
Even 4-4.5% might be safe, notwithstanding some ability to perhaps avoid withdrawals should there be a downturn impacting the pot.
Perhaps one starts taking out the lowest amount possible for a year or two in order to let the pot build up it's own 'resilience' against a sudden drop....Plan for tomorrow, enjoy today!0 -
Deleted_User wrote: »Did IFA explain his logic of mixing these overlapping funds in strange proportions? What asset allocation was he targeting? Why do you need an income fund given that you are not retired?
In general, future returns are unknown and it’s ok to have less than 6% return if there is a reason. Fund performance should be compared against an appropriate benchmark. I would be very concerned with an IFA saying that a particular vehicle “promises” to return 6%.
Over the last 10 years both stocks and bonds performed very well. Furthermore, sterling had a massive drop over that period which would make your sterling denominated assets look better than they really did.
And yes, 0.5% ongoing costs, while could be worse, are still high given what’s available on the market.
I would take a little time to read books on risk and asset allocation. Then select asset allocation. Finally pick an appropriate product which minimizes costs and maximizes simplicity.
P.S. when you say 0.5% ongoing, do you mean IFA charges on top of already expensive funds? Looking at the hotchpotch picked by this IFA, I’d say 0.5% is waste. Also, “growth” figures over a period of a few months are not in any way meaningful.
Thank you .
I am learning that I should have challenged/ questioned more the IFA’s recommendations, after the investments in the Pru I can now see it was just 5% into each of the other holdings.
I now know I am on an expensive platform and that because of the particular Pru holidings I cannot simply transfer time a cheaper/ better platform and whilst I am not happy with that due to poor performance over past 12 maths I am reluctant to incur more costs to sell / reinvest, albeit I can see merit of selling Navigator and Quilter holdings and reinvesting in a simple/ cheap Global tracker.
Yes the .5% relates entirely to IFA which I feel I could do without and just pay a one off fee for annual review after I sell/buy per above.0 -
The post I was responding to seems to have been withdrawn. However I will leave this one here just in case.
WP funds have been around for decades. Most WP funds have fallen by the wayside, but Prudential's ones have been doing their job for year after year for many many years. I have held a PruFund since 2001 and have detailed figures from soon after that date. Since buying the fund there has been an average annual return of 5.3%. The value of the investment was published annually. In my case:
4/2007: £14133
4/2008:£15152
4/2009:£14429
4/2010:£15208
4/2011:£16312
The .com crash was similar.
As to whether VLS40 is a conservative fund and the Prufund isnt - look at the long term graphs.0 -
Thanks- no all held on the Prudential platform.
Check to see if its an intrinsic adviser though. See the bottom of their letterhead to be sure. If so, you have a restricted FA. Not an IFA. Instrisic used to be an IFA network but for much of the last 7 or so years they have been encouraging their advisers to restrict. They had multiple levels of restriction. The more the adviser restricted, the better the terms the adviser got. Most of the funds you have are on the middle restriction but the cirrilium funds are on the most restrictive version.0 -
I appreciate we are in a period now of lower returns....perhaps for some time.....
......but if the funds are averaging 6.5% ps, and costs/fees are under 1%, presumably a 3% draw should be VERY comfortable, right?!
Even 4-4.5% might be safe, notwithstanding some ability to perhaps avoid withdrawals should there be a downturn impacting the pot.
Perhaps one starts taking out the lowest amount possible for a year or two in order to let the pot build up it's own 'resilience' against a sudden drop....
Dont forget inflation. The pot needs to increase by inflation each year to sustain an inflationary increase in amount drawn down.0 -
Thank you .
I am learning that I should have challenged/ questioned more the IFA’s recommendations, after the investments in the Pru I can now see it was just 5% into each of the other holdings.
I now know I am on an expensive platform and that because of the particular Pru holidings I cannot simply transfer time a cheaper/ better platform and whilst I am not happy with that due to poor performance over past 12 maths I am reluctant to incur more costs to sell / reinvest, albeit I can see merit of selling Navigator and Quilter holdings and reinvesting in a simple/ cheap Global tracker.
Yes the .5% relates entirely to IFA which I feel I could do without and just pay a one off fee for annual review after I sell/buy per above.
Advisers are just that. It’s your money, your decision, your family’s future. Ok to use an adviser if you have to and lack confidence but as a minimum you should educate yourself enough to ask the right questions and make an informed decision.
If I were you, I wouldn’t rush into changes, but read up and formulate an investment policy. Then you can decide to either keep you investments or make changes. Changes, if needed, should be done even if there are costs involved. Once you formulate a strategy, stick by it and ignore monthly return figures. Comparisons should be against benchmarks and I would say a period with at least one bear and one bull market is the minimum for meaningful comparisons vs benchmarks.0 -
Deleted_User wrote: »Advisers are just that. It’s your money, your decision, your family’s future. Ok to use an adviser if you have to and lack confidence but as a minimum you should educate yourself enough to ask the right questions and make an informed decision.
If I were you, I wouldn’t rush into changes, but read up and formulate an investment policy. Then you can decide to either keep you investments or make changes. Changes, if needed, should be done even if there are costs involved. Once you formulate a strategy, stick by it and ignore monthly return figures. Comparisons should be against benchmarks and I would say a period with at least one bear and one bull market is the minimum for meaningful comparisons vs benchmarks.
This is worrying - I dont disagree.
However comparisons against benchmarks are not too helpful if you are a very cautious investor - maximum returns are a secondary concern.0 -
The post I was responding to seems to have been withdrawn. However I will leave this one here just in case.
WP funds have been around for decades. Most WP funds have fallen by the wayside, but Prudential's ones have been doing their job for year after year for many many years. I have held a PruFund since 2001 and have detailed figures from soon after that date. Since buying the fund there has been an average annual return of 5.3%. The value of the investment was published annually. In my case:
4/2007: £14133
4/2008:£15152
4/2009:£14429
4/2010:£15208
4/2011:£16312
The .com crash was similar.
As to whether VLS40 is a conservative fund and the Prufund isnt - look at the long term graphs.
What are you talking about? Half of his money was invested in Prufund Growth which was launched on 25/11/2008. The only other fund with meaningful allocation is to Pru Cautious, which was launched on 25/08/2009. Why are you quoting arbitrary numbers for something else?
Neither fund has any track record for bear markets.
And no, 10 years’ of artificially smoothed returns over a bull market do not demonstrate conservatism. That’s a fallacy.
Underlying assets have less than 10% in UK fixed interest. Another 10% is in US fixed interest. No idea how much of that is in junk bonds. The rest is in volatile assets (mostly stocks but also some property and Asian bonds). These are the kind of assets which tend to suffer during a crisis.0 -
However comparisons against benchmarks are not too helpful if you are a very cautious investor - maximum returns are a secondary concern.
You look at how your fund responds to different market conditions, e.g. maximum drawdown vs a benchmark.0 -
Check to see if its an intrinsic adviser though. See the bottom of their letterhead to be sure. If so, you have a restricted FA. Not an IFA. Instrisic used to be an IFA network but for much of the last 7 or so years they have been encouraging their advisers to restrict. They had multiple levels of restriction. The more the adviser restricted, the better the terms the adviser got. Most of the funds you have are on the middle restriction but the cirrilium funds are on the most restrictive version.
Thanks
Website confirms IFA and talks about being fully independent .0
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