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@.

Search
  • FIRST POST
    • Gary Miles
    • By Gary Miles 9th Jul 18, 1:12 PM
    • 2Posts
    • 0Thanks
    Gary Miles
    Managed Futures/Hedgefunds
    • #1
    • 9th Jul 18, 1:12 PM
    Managed Futures/Hedgefunds 9th Jul 18 at 1:12 PM
    Hi,
    I am looking to invest some of my pension into Managed futures and Hedge Funds. Does anyone
    have experience of doing this in the U.K please ? For example I am looking at Dunn WMA, Milburn Multi markets program and AHL Evolution.
    Any suggestions of a low cost SIPP provider would be much appreciated.
    Also any websites or magazine suggestions to read, would be appreciated.
    Many thanks.
Page 1
    • grey gym sock
    • By grey gym sock 9th Jul 18, 1:55 PM
    • 4,444 Posts
    • 3,997 Thanks
    grey gym sock
    • #2
    • 9th Jul 18, 1:55 PM
    • #2
    • 9th Jul 18, 1:55 PM
    I am looking to invest some of my pension into Managed futures and Hedge Funds.
    Originally posted by Gary Miles
    why? (that's 2 questions: why managed futures? and why hedge funds?)
    • Gary Miles
    • By Gary Miles 9th Jul 18, 2:43 PM
    • 2 Posts
    • 0 Thanks
    Gary Miles
    • #3
    • 9th Jul 18, 2:43 PM
    • #3
    • 9th Jul 18, 2:43 PM
    I like the idea of diversified investments as opposed to the traditional long only shares. I'm getting nervous about investing in 2 asset classes (shares and bonds). I'm thinking trend following in many asset classes may offer better long term returns. If people think it's a bad idea, I'm happy to hear their opinion.
    Thanks.
    • Drp8713
    • By Drp8713 9th Jul 18, 2:53 PM
    • 843 Posts
    • 718 Thanks
    Drp8713
    • #4
    • 9th Jul 18, 2:53 PM
    • #4
    • 9th Jul 18, 2:53 PM
    If you want more diversification, I would look at adding Property, Commodities, Private Equity, Infrastructure, before going down alterative routes.
    • grey gym sock
    • By grey gym sock 9th Jul 18, 3:30 PM
    • 4,444 Posts
    • 3,997 Thanks
    grey gym sock
    • #5
    • 9th Jul 18, 3:30 PM
    • #5
    • 9th Jul 18, 3:30 PM
    IMHO, it's fair enough to consider possible diversifiers beyond shares + bonds. but many things touted as such don't really add anything useful to simpler portfolio. and they also can be very expensive.

    hedge funds i would dismiss outright as a category. the name suggests something market-neutral, but in practice many of them are not, and they can be run with very disparate strategies. some of which are probably decent strategies. but all hedge funds have in common is an excessive charging structure. which will almost certainly more than wipe out the advantages of following a decent strategy. and you won't have access to the best-regarded (or second-best-, or third-) hedge funds anyway. so why even look for something here?

    managed futures? presumably you mean with a trend-following strategy. there is a lot of evidence that trend-following (a.k.a. momentum) can work in many different kinds of markets. so in theory i think that could make sense for a small part of a portfolio. i'd want clear info about what methodology the manager is using, not a completely open remit. as well as charges not being excessive. i don't know if there's anything meeting those criteria available in the UK. (there's more such things in the US, e.g. some ETFs from AQR might be worth looking into - except that it's probably impossible to buy US ETFs now.)

    overall, i'd say decent diversifiers are difficult to find. and better not to use them than to pick a half-arsed one. if you're nervous about markets, you could hold more cash or (high-quality, short-term) bonds.
    • AnotherJoe
    • By AnotherJoe 9th Jul 18, 11:41 PM
    • 11,430 Posts
    • 13,201 Thanks
    AnotherJoe
    • #6
    • 9th Jul 18, 11:41 PM
    • #6
    • 9th Jul 18, 11:41 PM
    This is one of those "if you need to ask you shouldn't do it" questions.
    • bostonerimus
    • By bostonerimus 10th Jul 18, 12:12 AM
    • 2,423 Posts
    • 1,715 Thanks
    bostonerimus
    • #7
    • 10th Jul 18, 12:12 AM
    • #7
    • 10th Jul 18, 12:12 AM
    I'm with the other posters....why are you looking at hedge funds and managed futures? What are you trying to achieve that a sensible equity and fixed income portfolio can't provide.

    If you want some diversification you could look at direct property investments by buying a rental flat or REITs or some commodities funds.
    Misanthrope in search of similar for mutual loathing
    • Stirfry
    • By Stirfry 10th Jul 18, 10:35 AM
    • 77 Posts
    • 41 Thanks
    Stirfry
    • #8
    • 10th Jul 18, 10:35 AM
    • #8
    • 10th Jul 18, 10:35 AM
    This is one of those "if you need to ask you shouldn't do it" questions.
    Originally posted by AnotherJoe
    Have been considering First State Global Listed Infrastructure Class B Inc Hedged, and would like to ask the question (even if I shouldn't). Would I be better off taking a different class in this fund, it appears the charges are similar? I am thinking that having one Hedged fund while holding something in infrastructure might be worthwhile.
    To Hedge of not to Hedge?
    • AnotherJoe
    • By AnotherJoe 10th Jul 18, 12:56 PM
    • 11,430 Posts
    • 13,201 Thanks
    AnotherJoe
    • #9
    • 10th Jul 18, 12:56 PM
    • #9
    • 10th Jul 18, 12:56 PM
    IMO hedging is a waste of time long term, because you can only hold back the tide of falling sterling exchange rates for a short period, and worse, you are paying a premium for that which will reduce the overall performance for literally no gain. Or if sterling rises long term, you've diminished your return doubly.



    So, back to "if you need to ask", what is it you think you are gaining by hedging ? If for example the Pound falls from 1.40 to 1.10 dollars over the next 10 years for example, that's not something you can usefully hedge against.
    • grey gym sock
    • By grey gym sock 10th Jul 18, 8:23 PM
    • 4,444 Posts
    • 3,997 Thanks
    grey gym sock
    the general rule is: don't hedge equities, or infrastructure, or any other real assets. before costs, hedging could equally gain or lose you money. but it has costs, which add up over time.

    the case that's probably different is for non-sterling bonds, or other assets denominated in a currency other than sterling. because bonds are usually intended as the steady part of a portfolio, and they become a lot more volatile if they include exposure to currency fluctuations. so there is a reason you might be prepared to pay the cost of hedging here.
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

3,670Posts Today

9,187Users online

Martin's Twitter