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Shetland
Posted: 30 October 2020 20:43:30(UTC)
#53

Joined: 13/03/2015(UTC)
Posts: 1,243
King Lodos;135344 wrote:
CGT, Ruffer Total Return and Trojan vs the World Index .. Used Troy Trojan because PNL's only been advised by Troy since 2009 – so I don't know who was running PNL before that .. But CGT's up over PNL too

https://i.imgur.com/01vfjcH.png

These get called 'cash equivalents' a lot, but you see here, over the longest period I can get all three funds in, they're all beating 100% stocks. (no doubt helped by the bond bull market)





Interesting to see that the index beats CGT over 3m, 6m, 1 year, 3 years, 5 years and 10 years.
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King Lodos
Posted: 30 October 2020 20:54:32(UTC)
#54

Joined: 05/01/2016(UTC)
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Shetland;135348 wrote:

Interesting to see that the index beats CGT over 3m, 6m, 1 year, 3 years, 5 years and 10 years.


That's exactly why you should never backtest a portfolio or multi-asset strategy over less than a full market cycle.

When markets are only going up, all you need is risk and leverage
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3 users thanked King Lodos for this post.
Tim D on 30/10/2020(UTC), Mel Shapiro on 30/10/2020(UTC), Jesse M on 18/02/2021(UTC)
Shetland
Posted: 30 October 2020 21:05:28(UTC)
#56

Joined: 13/03/2015(UTC)
Posts: 1,243
I can never understand some people’s obsession with CGT. On a different thread someone described it as a ‘cash proxy’ !!
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1 user thanked Shetland for this post.
Fig Lee on 31/10/2020(UTC)
Tim D
Posted: 30 October 2020 22:46:22(UTC)
#57

Joined: 07/06/2017(UTC)
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Shetland;135352 wrote:
I can never understand some people’s obsession with CGT. On a different thread someone described it as a ‘cash proxy’ !!


That makes no sense. Here's the long term chart, comparing with some things which actually might fit the "cash proxy" name better. CGT is the green 'A' line:

CGT vs other stuff

Looking at the numbers underneath for just the last 10 years, IL gilts have at least given it a run but that's principally a product of the uplift to long duration bonds from interest rates being crushed.

The way these wealth preservation funds do well in the long run is by settling for modest returns in the bull runs, but then losing much less than the risk-on funds in the crashes. Unfortunately investors who don't understand the big picture only pile into them after the event when it's too late, and then get bored and drift away to apparently more lucrative investments in the subsequent bull market... just in time for the next crash. Monevator's look at it at https://monevator.com/ca...aring-investment-trust/ is worth a read.

Whether CGT (or PNL or RICA) can continue to deliver the same results in the "new normal" (if there's anything normal left these days) remains to be seen.
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8 users thanked Tim D for this post.
J-san on 30/10/2020(UTC), Fig Lee on 31/10/2020(UTC), Gary J on 31/10/2020(UTC), Monty Claret on 31/10/2020(UTC), King Lodos on 31/10/2020(UTC), Dave123 Jones on 31/10/2020(UTC), Jeff Liddiard on 31/10/2020(UTC), Jesse M on 18/02/2021(UTC)
Tyrion Lannister
Posted: 31 October 2020 01:11:48(UTC)
#80

Joined: 03/03/2017(UTC)
Posts: 2,029
On the OP question regarding PNL, I’m aware this has been a good fund historically but during the recent dip it’s performed no better than Fundsmith, but with the latter, of course, you get a good return in the good times.

So, my question is which is the best defensive fund? After all that’s the main reason most of us invest in PNL. Also, during the market collapse in Feb/March Fundsmith only fell marginally more than PNL.

Recently, treasuries and shares have fallen together, and not too long ago both gold and stocks were rising. Are the rules being rewritten or is this a temporary blip? Right now, I can’t see a case for anything other than stocks plus cash.
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Laurence O'Brien
Posted: 31 October 2020 06:08:40(UTC)
#88

Joined: 04/12/2014(UTC)
Posts: 943
Tyrion Lannister;135366 wrote:
On the OP question regarding PNL, I’m aware this has been a good fund historically but during the recent dip it’s performed no better than Fundsmith, but with the latter, of course, you get a good return in the good times.

So, my question is which is the best defensive fund? After all that’s the main reason most of us invest in PNL. Also, during the market collapse in Feb/March Fundsmith only fell marginally more than PNL.

Recently, treasuries and shares have fallen together, and not too long ago both gold and stocks were rising. Are the rules being rewritten or is this a temporary blip? Right now, I can’t see a case for anything other than stocks plus cash.


When you look at the holdings in Fundsmith, they mostly appear to have good defensive qualities with obvious exceptions like Amadeus and International Hotels but they are only exceptions because we are going through exceptional times. I think that Terry Smith has said that the fund was always intended to have this quality and that its growth has been a bit of a surprise to him.

I'm curious about the fall in treasuries. Anyone have any theories?
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Shetland
Posted: 31 October 2020 07:16:49(UTC)
#58

Joined: 13/03/2015(UTC)
Posts: 1,243
Tim D;135359 wrote:
Shetland;135352 wrote:
I can never understand some people’s obsession with CGT. On a different thread someone described it as a ‘cash proxy’ !!


That makes no sense. Here's the long term chart, comparing with some things which actually might fit the "cash proxy" name better. CGT is the green 'A' line:

CGT vs other stuff

Looking at the numbers underneath for just the last 10 years, IL gilts have at least given it a run but that's principally a product of the uplift to long duration bonds from interest rates being crushed.

The way these wealth preservation funds do well in the long run is by settling for modest returns in the bull runs, but then losing much less than the risk-on funds in the crashes. Unfortunately investors who don't understand the big picture only pile into them after the event when it's too late, and then get bored and drift away to apparently more lucrative investments in the subsequent bull market... just in time for the next crash. Monevator's look at it at https://monevator.com/ca...aring-investment-trust/ is worth a read.

Whether CGT (or PNL or RICA) can continue to deliver the same results in the "new normal" (if there's anything normal left these days) remains to be seen.


CGT clearly does not have the same characteristics as cash and therefore can never be described as a cash proxy. Anything which can lose capital value can't be described as a cash proxy.

I understand that CGT will lose less money than other IT's / funds but only because it hasn't made it. That is why CGT compares badly with most general global IT's / Funds
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bédé
Posted: 31 October 2020 07:41:30(UTC)
#78

Joined: 26/09/2018(UTC)
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Shetland;135372 wrote:

CGT clearly does not have the same characteristics as cash and therefore can never be described as a cash proxy. Anything which can lose capital value can't be described as a cash proxy.


Sorry, but words mean what one chooses them to mean. Proxy: stand-in, delegate ...
My MP is not me, but he is a good proxy.

Is cash so good at preserving value? What about gold?
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2 users thanked bédé for this post.
King Lodos on 31/10/2020(UTC), Tim D on 31/10/2020(UTC)
Aminatidi
Posted: 31 October 2020 08:32:13(UTC)
#82

Joined: 29/01/2018(UTC)
Posts: 5,865
Tyrion Lannister;135366 wrote:
So, my question is which is the best defensive fund? After all that’s the main reason most of us invest in PNL. Also, during the market collapse in Feb/March Fundsmith only fell marginally more than PNL.


I think this comes down to "define defensive" doesn't it?

If I knew categorically that I could sit out anything (financially and psychologically) and if I knew I wouldn't need to touch my money until a particular date my answer might be different to if I knew than I didn't have the psychological make-up to sit it out through anything and if there was a slim chance I might need to get at some or all of the money at some random time.
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Shetland
Posted: 31 October 2020 09:10:58(UTC)
#79

Joined: 13/03/2015(UTC)
Posts: 1,243
[quote=bédé;135373

Sorry, but words mean what one chooses them to mean. Proxy: stand-in, delegate ...
My MP is not me, but he is a good proxy.[/quote]


No they don't !! Words have standard meanings. That is why we have dictionaries. Life would be very confusing if we each chose our own definition of words.

By describing CGT as a cash proxy you are misleading people into thinking their capital sum is safe.

I am concerned that newcomers to investing and this forum could be mislead into a false sense of security.
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