Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • lionel hutz
    • By lionel hutz 24th May 19, 8:18 PM
    • 36Posts
    • 2Thanks
    lionel hutz
    Funds investment advice
    • #1
    • 24th May 19, 8:18 PM
    Funds investment advice 24th May 19 at 8:18 PM
    Since paying off my mortgage I have been putting the money I would have used for that into an ISA. I have saved up 25K but it isnít really doing anything for me and I donít expect to need it so Iíve been researching funds (with some help from on here).
    I am looking at long term, approx 10 years minimum and I am happy to take a risk.
    Your opinions on what Iím going to do would be appreciated....
    Invest 15-20K equally into two funds transferring the current ISA, Baillie Gifford global discovery AND Legal & General global 100 fund (one aimed at smaller companies, one aimed at larger companies).
    I was also going to invest £500 each month using this years ISA into something more lower risk such as HSBC European index or Vanguards FTSE 250 fund.
    Keep the remaining 10K in the ISA for emergencies.
Page 1
    • AnotherJoe
    • By AnotherJoe 24th May 19, 8:29 PM
    • 14,669 Posts
    • 17,519 Thanks
    AnotherJoe
    • #2
    • 24th May 19, 8:29 PM
    • #2
    • 24th May 19, 8:29 PM
    Since paying off my mortgage I have been putting the money I would have used for that into an ISA. I have saved up 25K but it isnít really doing anything for me and I donít expect to need it so Iíve been researching funds (with some help from on here).
    I am looking at long term, approx 10 years minimum and I am happy to take a risk.
    Your opinions on what Iím going to do would be appreciated....
    Invest 15-20K equally into two funds transferring the current ISA, Baillie Gifford global discovery AND Legal & General global 100 fund (one aimed at smaller companies, one aimed at larger companies).
    I was also going to invest £500 each month using this years ISA into something more lower risk such as HSBC European index or Vanguards FTSE 250 fund.
    Keep the remaining 10K in the ISA for emergencies.
    Originally posted by lionel hutz
    I'd say the latter two would be higher risk not lower.
    Offhand, wouldn't the effect of picking top 100 and very small companies just be the same as picking the middle ground of a global fund that covered the top 5k or so ? Test that anyway, look at prices of all three over say ten years and see what it looks like.
    It also seems a bit contrived to me, there's nothing magic about 100, it's only there because it's a neat round number. So why pick that?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • DrSyn
    • By DrSyn 24th May 19, 10:16 PM
    • 556 Posts
    • 314 Thanks
    DrSyn
    • #3
    • 24th May 19, 10:16 PM
    • #3
    • 24th May 19, 10:16 PM
    1. I suggest watching the following:

    http://www.kroijer.com/

    https://www.ifa.com/indexfundsthemovie/


    2. Have you considered using a Multi-Asset Fund?

    Multi-Asset Funds

    Vantage Life Strategy
    HSBC Global Strategy
    L&G Multi Index Funds
    Blackrock Consensus
    Architas Passive

    These have wide diversification while minimising risk, at low cost.
    • Alz1986
    • By Alz1986 25th May 19, 12:07 AM
    • 82 Posts
    • 20 Thanks
    Alz1986
    • #4
    • 25th May 19, 12:07 AM
    • #4
    • 25th May 19, 12:07 AM
    You really dont want to start getting involved with volatile funds which appear to have done 100% return in 3 years - the short term plunges and volatility will wear you down.


    You need to see growth, even if its slow. Otherwise



    HSBC American index tracks the S&P500 or Vanguards SRI Global Stock is a good one too. I made mistakes by choosing funds which plunged during the bad times and rised during the good times - you make errors in between buying and selling.
    • lionel hutz
    • By lionel hutz 25th May 19, 6:06 AM
    • 36 Posts
    • 2 Thanks
    lionel hutz
    • #5
    • 25th May 19, 6:06 AM
    • #5
    • 25th May 19, 6:06 AM
    You really dont want to start getting involved with volatile funds which appear to have done 100% return in 3 years - the short term plunges and volatility will wear you down.


    You need to see growth, even if itís slow .
    Originally posted by Alz1986
    Are you saying if a fund has grown a lot over 3 years then itís probably not going to see much growth, if any over the next few years?
    I do want to invest in something with a bit more risk though.
    Also the baillie Gifford fund was very well rated.
    • OldBill
    • By OldBill 25th May 19, 10:28 AM
    • 32 Posts
    • 4 Thanks
    OldBill
    • #6
    • 25th May 19, 10:28 AM
    • #6
    • 25th May 19, 10:28 AM
    DrSyn's advice should be taken.

    Those short Lars Kroijer videos are worth their weight in gold.

    Even I understood them.
    • Prism
    • By Prism 25th May 19, 3:26 PM
    • 880 Posts
    • 676 Thanks
    Prism
    • #7
    • 25th May 19, 3:26 PM
    • #7
    • 25th May 19, 3:26 PM
    Not that it won't grow as fast. It may or may not. I quite like the Baillie Gifford approach but it's pretty volatile
    • Alz1986
    • By Alz1986 26th May 19, 3:32 AM
    • 82 Posts
    • 20 Thanks
    Alz1986
    • #8
    • 26th May 19, 3:32 AM
    • #8
    • 26th May 19, 3:32 AM
    As others have said, you may or may not. Having invested into several Baillie Gifford funds, their plunges and volatility is frustrating to new investors, I too said I dont mind volatility, to my credit, I am still invested, despite the funds not recovering yet. The psychology behind it all is that new investors need a good first impression, not a disastrous one.
    • lionel hutz
    • By lionel hutz 26th May 19, 7:42 PM
    • 36 Posts
    • 2 Thanks
    lionel hutz
    • #9
    • 26th May 19, 7:42 PM
    • #9
    • 26th May 19, 7:42 PM
    1. I suggest watching the following:

    http://www.kroijer.com/

    https://www.ifa.com/indexfundsthemovie/


    2. Have you considered using a Multi-Asset Fund?

    Multi-Asset Funds

    Vantage Life Strategy
    HSBC Global Strategy
    L&G Multi Index Funds
    Blackrock Consensus
    Architas Passive

    These have wide diversification while minimising risk, at low cost.
    Originally posted by DrSyn
    Those videos where very useful, to the point where I think Iíll downgrade the risk I was prepared to take and go for a global indexed fund. Considering vanguards FTSE global index fund as
    charges seem decent at 0.24% alongside a decent return.
    • pioruns
    • By pioruns 26th May 19, 9:49 PM
    • 96 Posts
    • 28 Thanks
    pioruns
    You couldn't have made a better decision at this point. I've done the same few months ago. Ditched actively managed funds and went ahead with FTSE All-World index fund. Now I can sleep relaxed knowing, that realistically speaking I couldn't have done it any better.
    • bowlhead99
    • By bowlhead99 27th May 19, 12:33 AM
    • 8,842 Posts
    • 16,191 Thanks
    bowlhead99
    I think I’ll downgrade the risk I was prepared to take and go for a global indexed fund. Considering vanguards FTSE global index fund as
    charges seem decent at 0.24% alongside a decent return.
    Originally posted by lionel hutz
    You couldn't have made a better decision at this point. I've done the same few months ago. Ditched actively managed funds and went ahead with FTSE All-World index fund. Now I can sleep relaxed knowing, that realistically speaking I couldn't have done it any better.
    Originally posted by pioruns
    The largest peak-to-trough drawdown (on a total return basis, in USD) for the FTSE All-World index in the last 12 years was 57.9%, between autumn 2007 and March 2009. During that crash, known as the 'global financial crisis' or 'credit crunch', $100 in the fund fell to $42.10 (including the value of dividends received and reinvested along the way) before it started to recover and go back up.

    This may be the sort of fund which helps you sleep relaxed - if, like the OP mentioned in his first post, you are 'happy to take a risk'.

    To the OP who is thinking of downgrading the risk he was going to take from using a single-region specialist fund like a European Index or a UK mid 250 index fund - it's true that using a global fund is better investing than in a single regional area. But clearly if the fund is 100% equities, and 94% of those equities are listed in foreign countries, it's still going to be pretty high risk, and 10 years is not necessarily long enough to get 'long term average' results; it could be a good decade or a bad one or a middling one.

    The decent return of the last 10 years (since the absolute market bottom of the crash which started to recover in March 2009) should not really be expected to be repeated for the next 10 years, not least because we are not starting from the absolute bottom of a crash, but rather from close to the peak.
    Last edited by bowlhead99; 27-05-2019 at 12:36 AM.
    • OldBill
    • By OldBill 27th May 19, 5:39 AM
    • 32 Posts
    • 4 Thanks
    OldBill
    Those videos where very useful, to the point where I think Iíll downgrade the risk I was prepared to take and go for a global indexed fund. Considering vanguards FTSE global index fund as
    charges seem decent at 0.24% alongside a decent return.
    Originally posted by lionel hutz
    The videos are excellent - it's just finding the right fund that really matches what Kroijer recommends that is tricky.

    None of the funds that I have researched so far really "mirror" his global equity picture.

    And as for bonds, the best advice at the moment is that the UK gilts he recommends as being the best choice as are, in fact, a bad choice due to low interest rates, and that therefore an investor would be better off keeping his cash in a savings account!
    • lionel hutz
    • By lionel hutz 27th May 19, 7:45 AM
    • 36 Posts
    • 2 Thanks
    lionel hutz
    The videos are excellent - it's just finding the right fund that really matches what Kroijer recommends that is tricky.

    None of the funds that I have researched so far really "mirror" his global equity picture.
    Originally posted by OldBill
    I agree thereís no IDEAL fund. But taking a global picture view seems best. As the previous poster put there could be a huge global crash at any point in time, but if this where to happen then I believe any sort of fund (or similar) wouldnít be able to escape it.
    Iím going to get the vanguard fund via the iWeb platform as it doesnt eat into it as much with high costs.
    • OldBill
    • By OldBill 27th May 19, 7:55 AM
    • 32 Posts
    • 4 Thanks
    OldBill
    I agree thereís no IDEAL fund. But taking a global picture view seems best. As the previous poster put there could be a huge global crash at any point in time, but if this where to happen then I believe any sort of fund (or similar) wouldnít be able to escape it.
    Iím going to get the vanguard fund via the iWeb platform as it doesnt eat into it as much with high costs.
    Originally posted by lionel hutz
    I agree that there is no IDEAL fund. The problem I am finding is that, whatever the equities proportion of the multi-asset funds is, the UK is way over-represented - 20-25%, whereas the figure should surely be nearer 5%, certainly no more than 10%.

    There seems to be an inbuilt disposition by whoever designs these funds for UK investors to buy to over-egg the UK equity pudding. And that does little justice to the claim that the fund is in any way - not just ideally - accurately "global".

    I'm not asking for perfection - just a wee bit more accuracy. Is this too much to ask?
    • Prism
    • By Prism 27th May 19, 8:02 AM
    • 880 Posts
    • 676 Thanks
    Prism
    I agree that there is no IDEAL fund. The problem I am finding is that, whatever the equities proportion of the multi-asset funds is, the UK is way over-represented - 20-25%, whereas the figure should surely be nearer 5%, certainly no more than 10%.

    There seems to be an inbuilt disposition by whoever designs these funds for UK investors to buy to over-egg the UK equity pudding. And that does little justice to the claim that the fund is in any way - not just ideally - accurately "global".

    I'm not asking for perfection - just a wee bit more accuracy. Is this too much to ask?
    Originally posted by OldBill
    Those funds are global as the FTSE 100 is very global itself. Its just that they emphasize UK sectors like finance and oil, over lets say tech. For a 100% equities fund there is plenty of choice to represent the world market. For multi asset funds you just need to be more selective - e.g HSBC Global Strategy or similar
    • pioruns
    • By pioruns 27th May 19, 8:34 AM
    • 96 Posts
    • 28 Thanks
    pioruns
    The videos are excellent - it's just finding the right fund that really matches what Kroijer recommends that is tricky.

    None of the funds that I have researched so far really "mirror" his global equity picture.

    And as for bonds, the best advice at the moment is that the UK gilts he recommends as being the best choice as are, in fact, a bad choice due to low interest rates, and that therefore an investor would be better off keeping his cash in a savings account!
    Originally posted by OldBill

    There is a very good candidate to meet Lars criteria - FTSE All-World. It's being offered by Vanguard and HSBC. HSBC has cheaper OCF than Vanguard's and it's available on iWeb.
    • OldBill
    • By OldBill 27th May 19, 8:46 AM
    • 32 Posts
    • 4 Thanks
    OldBill
    There is a very good candidate to meet Lars criteria - FTSE All-World. It's being offered by Vanguard and HSBC. HSBC has cheaper OCF than Vanguard's and it's available on iWeb.
    Originally posted by pioruns
    Yes, the Vanguard All World is one I'm looking at, though their Global All-Cap is even more diversified (~6,000 as opposed to ~3,000 companies).
    • AnotherJoe
    • By AnotherJoe 27th May 19, 9:28 AM
    • 14,669 Posts
    • 17,519 Thanks
    AnotherJoe
    Yes, the Vanguard All World is one I'm looking at, though their Global All-Cap is even more diversified (~6,000 as opposed to ~3,000 companies).
    Originally posted by OldBill
    That's what I thought but Look at the performance of the two and they are near identical
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • pioruns
    • By pioruns 27th May 19, 9:42 AM
    • 96 Posts
    • 28 Thanks
    pioruns
    Vanguard fund is based on FTSE Global All Cap Index, and HSBC fund is based on FTSE All-World Index.
    Factsheets of the underlying benchmarks are here: https://www.ftse.com/products/indices/geis-series
    I recommend to read and compare Very similar composition, very similar results. Vanguard's and HSBC funds are behaving as expected, mirroring underlying indexes. HSBC fund holds fewer stocks, has lower OCF and slightly higher returns. Vanguard has more constituents and slightly lower return over the years, while you pay a fraction more in OCF.

    But you can generally chose whatever you prefer or what is available on your platform, they are nearly identical, especially if one plans to use Vanguard's platform to monthly deposit small sum, this would work better.
    I use iWeb, I don't want frequent transactions, I went ahead with HSBC fund, did lump sum to ISA to use up my annual allowance, and I am all done for a year.
    Last edited by pioruns; 27-05-2019 at 9:49 AM.
    • A_T
    • By A_T 27th May 19, 10:05 AM
    • 669 Posts
    • 483 Thanks
    A_T
    I agree that there is no IDEAL fund. The problem I am finding is that, whatever the equities proportion of the multi-asset funds is, the UK is way over-represented - 20-25%, whereas the figure should surely be nearer 5%, certainly no more than 10%.

    There seems to be an inbuilt disposition by whoever designs these funds for UK investors to buy to over-egg the UK equity pudding. And that does little justice to the claim that the fund is in any way - not just ideally - accurately "global".

    I'm not asking for perfection - just a wee bit more accuracy. Is this too much to ask?
    Originally posted by OldBill
    Fidelity Multi Asset Allocator funds give the UK an amount that fairly accurately reflects it's share of global market capitalisation.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,319Posts Today

7,364Users online

Martin's Twitter