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Cm258
Posted: 23 January 2025 06:54:33(UTC)
#77

Joined: 30/07/2022(UTC)
Posts: 458

Thanks: 869 times
Was thanked: 712 time(s) in 298 post(s)
ben ski;331984 wrote:
SF100;331977 wrote:

Would they? Based on what?
Define 'similar asset profiles'
And what if we end up back at zirp,
still no downside and we should just adopt a 60:40 MAF anyway?


I think in principle, MAFs should be no-brainers. They could do everything SJP charge you 2-3% for..

But I think they're too undefined for real investors. There's an argument that long duration bonds are really for institutionals (insurance, endowments, etc.) – they can have 40, 50 year liabilities to match. For a typical saver, it doesn't make much sense to have capital tied up that long. So LifeStrategy did its job, of tracking the market. But was the market's exposure to bonds really right for a saver?

I think the same with real assets. These MAFs are all-in on financial assets. And in the real economy, real assets are much bigger market than stocks. The 1970s would've been a bad time for most these MAFs.


Interestingly, AJ Bell have gone the other way with real assets (infra, property). See https://www.trustnet.com...ional-bonds-and-equities
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2 users thanked Cm258 for this post.
Helen L on 23/01/2025(UTC), Peanuts on 23/01/2025(UTC)
Jed Mires
Posted: 23 January 2025 09:30:29(UTC)
#80

Joined: 04/04/2023(UTC)
Posts: 338
SF100;331977 wrote:
Jed Mires;331963 wrote:
SF100;331956 wrote:
Jed Mires;331947 wrote:
Rory Barr;331916 wrote:

But once you're in your 60s, have worked hard to build some wealth which you'll depend upon for the rest of your days (in SIPPs, ISAs and GIAs), why not just go with one or two 60:40 funds from, say HSBC and Fidelity, and get on with life?

What's the downside to this approach from an investment perspective (not the 'missing the fun of managing a portfolio' aspects) and does any of it outweigh just doing it...?


You are right and there is no downside. Its very very easy to get good returns relative to all other investors with similar asset profiles by simply buying a multi assset fund (such as Vanguard LS ). If however you want excellent returns its difficult because every step you take to achieve this could also produce poor returns. Its very easy to produce very poor returns trying to produce excellent returns.


No downside?
VLS 40 Inc has done +0.8% annualised last 5 years.
Paying an income of 2%.
That doesn't include drawing down any capital.

Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

If your pot was v large, like xxd09, maybe...maybe.
If not, potential for much downside, mental health for one.



If that was the asset profile you choose, bond heavy then you returns would be in line with similar asset profiles.

Would they? Based on what?
Define 'similar asset profiles'
And what if we end up back at zirp,
still no downside and we should just adopt a 60:40 MAF anyway?



Its up to the individual investor to select their asset profile. Whats going to be your asset profile going forward, are equities expensive are you going to sell them and buy relatively cheap bonds. Are equities going to be good for another few years, maybe increase US exposure with Trump is president. Its your call, whats best for the next 5 years, you can only know the best asset profile in retrospect. When you have decided your asset profile, the easy way is to select a multiasset fund (hsbc, vanguard etc) and your returns will be good in relation to all other investors with similar asset profiles. Of course its not the only way but its as easy as you can get, a one fund portfolio.
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Jed Mires
Posted: 23 January 2025 09:44:32(UTC)
#83

Joined: 04/04/2023(UTC)
Posts: 338
Thrugelmir;331964 wrote:
Jed Mires;331963 wrote:
SF100;331956 wrote:
Jed Mires;331947 wrote:
Rory Barr;331916 wrote:

But once you're in your 60s, have worked hard to build some wealth which you'll depend upon for the rest of your days (in SIPPs, ISAs and GIAs), why not just go with one or two 60:40 funds from, say HSBC and Fidelity, and get on with life?

What's the downside to this approach from an investment perspective (not the 'missing the fun of managing a portfolio' aspects) and does any of it outweigh just doing it...?


You are right and there is no downside. Its very very easy to get good returns relative to all other investors with similar asset profiles by simply buying a multi assset fund (such as Vanguard LS ). If however you want excellent returns its difficult because every step you take to achieve this could also produce poor returns. Its very easy to produce very poor returns trying to produce excellent returns.


No downside?
VLS 40 Inc has done +0.8% annualised last 5 years.
Paying an income of 2%.
That doesn't include drawing down any capital.

Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

If your pot was v large, like xxd09, maybe...maybe.
If not, potential for much downside, mental health for one.



If that was the asset profile you choose, bond heavy then you returns would be in line with similar asset profiles.


Don't recall many people discussing or investing in bond heavy funds 5 years ago. No one was discussing Microsoft in 2010 when it was on a P/E of 10 either. Hindsight is a wonderful thing, but foresight is better.



I wasnt on this forum 5 years ago I will accept what you say. Because the bond heavy funds existed there were investors in these funds and a lot of investors in bond heavy active multi asset funds holding big chunks of IL bonds with yields of minus 2-3%.

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SF100
Posted: 23 January 2025 13:01:57(UTC)
#81

Joined: 08/02/2020(UTC)
Posts: 2,254
Jed Mires;331999 wrote:
SF100;331977 wrote:
Jed Mires;331963 wrote:
SF100;331956 wrote:
Jed Mires;331947 wrote:
Rory Barr;331916 wrote:

But once you're in your 60s, have worked hard to build some wealth which you'll depend upon for the rest of your days (in SIPPs, ISAs and GIAs), why not just go with one or two 60:40 funds from, say HSBC and Fidelity, and get on with life?

What's the downside to this approach from an investment perspective (not the 'missing the fun of managing a portfolio' aspects) and does any of it outweigh just doing it...?


You are right and there is no downside. Its very very easy to get good returns relative to all other investors with similar asset profiles by simply buying a multi assset fund (such as Vanguard LS ). If however you want excellent returns its difficult because every step you take to achieve this could also produce poor returns. Its very easy to produce very poor returns trying to produce excellent returns.


No downside?
VLS 40 Inc has done +0.8% annualised last 5 years.
Paying an income of 2%.
That doesn't include drawing down any capital.

Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

If your pot was v large, like xxd09, maybe...maybe.
If not, potential for much downside, mental health for one.



If that was the asset profile you choose, bond heavy then you returns would be in line with similar asset profiles.

Would they? Based on what?
Define 'similar asset profiles'
And what if we end up back at zirp,
still no downside and we should just adopt a 60:40 MAF anyway?



Its up to the individual investor to select their asset profile. Whats going to be your asset profile going forward, are equities expensive are you going to sell them and buy relatively cheap bonds. Are equities going to be good for another few years, maybe increase US exposure with Trump is president. Its your call, whats best for the next 5 years, you can only know the best asset profile in retrospect. When you have decided your asset profile, the easy way is to select a multiasset fund (hsbc, vanguard etc) and your returns will be good in relation to all other investors with similar asset profiles. Of course its not the only way but its as easy as you can get, a one fund portfolio.


Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

Presumably if the answer is no, then there is a downside?
Feel free to quote VLS60 instead, if you like
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Jed Mires
Posted: 23 January 2025 13:21:05(UTC)
#88

Joined: 04/04/2023(UTC)
Posts: 338
SF100 I didnt retire 5 years ago more like 2 years ago. If I was retiring now I would be happy to retire using a multiasset fund. At the moment my portfolio is not in a multiasset fund however I dont want to leave a portfolio behind when Im gone. Therefore at some point in the future I will put my entire pf into one multiasset fund.
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Thrugelmir
Posted: 23 January 2025 13:31:36(UTC)
#84

Joined: 01/06/2012(UTC)
Posts: 5,317

Thanks: 3255 times
Was thanked: 7876 time(s) in 3263 post(s)
Jed Mires;332001 wrote:
Thrugelmir;331964 wrote:
Jed Mires;331963 wrote:
SF100;331956 wrote:
Jed Mires;331947 wrote:
Rory Barr;331916 wrote:

But once you're in your 60s, have worked hard to build some wealth which you'll depend upon for the rest of your days (in SIPPs, ISAs and GIAs), why not just go with one or two 60:40 funds from, say HSBC and Fidelity, and get on with life?

What's the downside to this approach from an investment perspective (not the 'missing the fun of managing a portfolio' aspects) and does any of it outweigh just doing it...?


You are right and there is no downside. Its very very easy to get good returns relative to all other investors with similar asset profiles by simply buying a multi assset fund (such as Vanguard LS ). If however you want excellent returns its difficult because every step you take to achieve this could also produce poor returns. Its very easy to produce very poor returns trying to produce excellent returns.


No downside?
VLS 40 Inc has done +0.8% annualised last 5 years.
Paying an income of 2%.
That doesn't include drawing down any capital.

Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

If your pot was v large, like xxd09, maybe...maybe.
If not, potential for much downside, mental health for one.



If that was the asset profile you choose, bond heavy then you returns would be in line with similar asset profiles.


Don't recall many people discussing or investing in bond heavy funds 5 years ago. No one was discussing Microsoft in 2010 when it was on a P/E of 10 either. Hindsight is a wonderful thing, but foresight is better.



I wasnt on this forum 5 years ago I will accept what you say. Because the bond heavy funds existed there were investors in these funds and a lot of investors in bond heavy active multi asset funds holding big chunks of IL bonds with yields of minus 2-3%.



IL Gilts have long been the preserve of institutional investors. They were designed for the likes of pension funds etc. Investors who thought that they knew how how they worked severely got their fingers burnt in the 2022 correction. Multi Asset funds don't go heavily weighted into IL . They'll stick to the fixed coupon variety.
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1 user thanked Thrugelmir for this post.
Sheerman on 23/01/2025(UTC)
Jed Mires
Posted: 23 January 2025 13:43:38(UTC)
#85

Joined: 04/04/2023(UTC)
Posts: 338
Thrugelmir;332026 wrote:
Jed Mires;332001 wrote:
Thrugelmir;331964 wrote:
Jed Mires;331963 wrote:
SF100;331956 wrote:
Jed Mires;331947 wrote:
Rory Barr;331916 wrote:

But once you're in your 60s, have worked hard to build some wealth which you'll depend upon for the rest of your days (in SIPPs, ISAs and GIAs), why not just go with one or two 60:40 funds from, say HSBC and Fidelity, and get on with life?

What's the downside to this approach from an investment perspective (not the 'missing the fun of managing a portfolio' aspects) and does any of it outweigh just doing it...?


You are right and there is no downside. Its very very easy to get good returns relative to all other investors with similar asset profiles by simply buying a multi assset fund (such as Vanguard LS ). If however you want excellent returns its difficult because every step you take to achieve this could also produce poor returns. Its very easy to produce very poor returns trying to produce excellent returns.


No downside?
VLS 40 Inc has done +0.8% annualised last 5 years.
Paying an income of 2%.
That doesn't include drawing down any capital.

Would you have been happy retiring 5 years ago on that,
+ the prospect of rates nudging upward for another few years?

If your pot was v large, like xxd09, maybe...maybe.
If not, potential for much downside, mental health for one.



If that was the asset profile you choose, bond heavy then you returns would be in line with similar asset profiles.


Don't recall many people discussing or investing in bond heavy funds 5 years ago. No one was discussing Microsoft in 2010 when it was on a P/E of 10 either. Hindsight is a wonderful thing, but foresight is better.



I wasnt on this forum 5 years ago I will accept what you say. Because the bond heavy funds existed there were investors in these funds and a lot of investors in bond heavy active multi asset funds holding big chunks of IL bonds with yields of minus 2-3%.



IL Gilts have long been the preserve of institutional investors. They were designed for the likes of pension funds etc. Investors who thought that they knew how how they worked severely got their fingers burnt in the 2022 correction. Multi Asset funds don't go heavily weighted into IL . They'll stick to the fixed coupon variety.


The active, bond heavy multiasset ,funds had plenty of negaitve yielding IL bonds in them.
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Anthony French
Posted: 23 January 2025 13:54:27(UTC)
#89

Joined: 09/09/2018(UTC)
Posts: 9,129
If you buy a UK Government gilt near to its redemption price of £100, lower for lower interest gilt coupons,
a low interest gilt if held outside a tax free wrapper where capital gain is tax free.
If held to its redemption date, it's risk free.
If held inside a tax wrapper yield versus your required time frame.
It really is that simple.
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SF100
Posted: 23 January 2025 13:57:44(UTC)
#91

Joined: 08/02/2020(UTC)
Posts: 2,254
Jed - are you a politician..
the question was 5yrs not 2yrs ago.
and I believe we are generally on theme of passive rather than active funds wrt IL bonds...
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1 user thanked SF100 for this post.
Jed Mires on 23/01/2025(UTC)
SF100
Posted: 23 January 2025 13:59:42(UTC)
#90

Joined: 08/02/2020(UTC)
Posts: 2,254
Anthony French;332030 wrote:
If you buy a UK Government gilt near to its redemption price of £100, lower for lower interest gilt coupons,
a low interest gilt if held outside a tax free wrapper where capital gain is tax free.
If held to its redemption date, it's risk free.
If held inside a tax wrapper yield versus your required time frame.
It really is that simple.


Thanks einstein
I think that expertise is resoundly covered now, over last 3 years...
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