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Tim Hale Global Tilted Portfolio 60 & 80
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ben ski
Posted: 27 November 2024 22:02:21(UTC)
#35

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In fact here's my 65:35 on InvestEngine, up nearly 20% over a year. Sector tilts provide better diversification and control than factors. But it's basically VWRL, gold and cash.

https://i.imgur.com/GTWJfsx.png

https://i.imgur.com/5MANC6v.png
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6 users thanked ben ski for this post.
Cm258 on 27/11/2024(UTC), Peanuts on 28/11/2024(UTC), Guest on 28/11/2024(UTC), Helen L on 28/11/2024(UTC), Micawber on 28/11/2024(UTC), Guest on 29/11/2024(UTC)
L.P.
Posted: 27 November 2024 22:11:44(UTC)
#30

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Cm258;327074 wrote:
Aminatidi;327071 wrote:
Thank you and no need it just struck me that if Hale is a tilt on a "neutral" portfolio LifeStrategy isn't neutral either so you'd think any "gap" would be skewed a little👍🏻


Yes, Hale suggests there is a premium in small caps and value stocks, hence the 'tilt'. So technically it and LS60 are 'tilted'.

I'm sure a lot will say 'is the juice worth the squeeze' and why don't I just go with one or all of the three funds listed in my previous post. But now it's setup I will rebalance annually and there's no other bother.


Thanks for sharing.

I would just sack the experiment and buy all three (for disclosure: I have hefty stakes in the first two).

You really are going to have to be on it when it comes to re-balancing and the temptation to do something different might be too great. The three funds will do it for you, it might be cheaper and more than likely you will not outperform them.
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2 users thanked L.P. for this post.
Cm258 on 27/11/2024(UTC), Helen L on 28/11/2024(UTC)
Cm258
Posted: 27 November 2024 22:18:22(UTC)
#33

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ben ski;327089 wrote:
I think the portfolios look alright .. It will take another 30-40 years before you've got enough forward-testing to really make a meaningful conclusion, as everything certainly within 10-15 years is just random.

I like that the bond allocation is just government bonds. That's in line with the evidence. I think the value and small-cap tilts are a waste of time. The 'small cap premium' never existed – it was just bad data. And value is still debatable, but every ETF that tracks it arbitrages away whatever there may be left of it.

What would've really made it do better, that there's plenty of backtest data to support, would be a 10-20% allocation to gold. I also don't think Vanguard or HSBC's portfolios make a whole lot of sense. I think they're unnecessarily complicated. VWRL and 10 year treasuries is hard to beat over meaningful periods, and I'd add 5-10% gold anyway, even if you can argue it's expensive.


I don't think any of the below have any gold exposure, but there are a few articles on Monevator that clearly show just how good a diversifier and performer it has been over recent decades. Certainly when compared to cash or government bonds.

HSBC Global Strategy
Vanguard LifeStrategy
Fidelity Multi Asset Allocator
L&G Multi-Index

What are your thoughts on the 6% property exposure in Tim Hales portfolio? The HSBC, L&G and Fidelity funds follow this. Not Vanguard though.

So your ideal 'balanced portfolio ' then is something like..

50% All World Equities (you agree you want Emerging Markets?)
40% 10 year US Treasuries (no gilts or other developed government bonds?)
10% gold
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3 users thanked Cm258 for this post.
ben ski on 27/11/2024(UTC), Helen L on 28/11/2024(UTC), L.P. on 29/11/2024(UTC)
Cm258
Posted: 27 November 2024 22:28:31(UTC)
#31

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L.P.;327091 wrote:
Cm258;327074 wrote:
Aminatidi;327071 wrote:
Thank you and no need it just struck me that if Hale is a tilt on a "neutral" portfolio LifeStrategy isn't neutral either so you'd think any "gap" would be skewed a little👍🏻


Yes, Hale suggests there is a premium in small caps and value stocks, hence the 'tilt'. So technically it and LS60 are 'tilted'.

I'm sure a lot will say 'is the juice worth the squeeze' and why don't I just go with one or all of the three funds listed in my previous post. But now it's setup I will rebalance annually and there's no other bother.


Thanks for sharing.

I would just sack the experiment and buy all three (for disclosure: I have hefty stakes in the first two).

You really are going to have to be on it when it comes to re-balancing and the temptation to do something different might be too great. The three funds will do it for you, it might be cheaper and more than likely you will not outperform them.



I get it and appreciate the honest feedback. Easy to look at the below and just go 'why bother'..
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Aminatidi on 28/11/2024(UTC), L.P. on 29/11/2024(UTC)
ben ski
Posted: 27 November 2024 22:52:24(UTC)
#34

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Cm258;327093 wrote:
ben ski;327089 wrote:
I think the portfolios look alright .. It will take another 30-40 years before you've got enough forward-testing to really make a meaningful conclusion, as everything certainly within 10-15 years is just random.

I like that the bond allocation is just government bonds. That's in line with the evidence. I think the value and small-cap tilts are a waste of time. The 'small cap premium' never existed – it was just bad data. And value is still debatable, but every ETF that tracks it arbitrages away whatever there may be left of it.

What would've really made it do better, that there's plenty of backtest data to support, would be a 10-20% allocation to gold. I also don't think Vanguard or HSBC's portfolios make a whole lot of sense. I think they're unnecessarily complicated. VWRL and 10 year treasuries is hard to beat over meaningful periods, and I'd add 5-10% gold anyway, even if you can argue it's expensive.


I don't think any of the below have any gold exposure, but there are a few articles on Monevator that clearly show just how good a diversifier and performer it has been over recent decades. Certainly when compared to cash or government bonds.

HSBC Global Strategy
Vanguard LifeStrategy
Fidelity Multi Asset Allocator
L&G Multi-Index

What are your thoughts on the 6% property exposure in Tim Hales portfolio? The HSBC, L&G and Fidelity funds follow this. Not Vanguard though.

So your ideal 'balanced portfolio ' then is something like..

50% All World Equities (you agree you want Emerging Markets?)
40% 10 year US Treasuries (no gilts or other developed government bonds?)
10% gold


I think gold works well because it has a bit of an inverse relationship with the dollar – and when we've got a weak dollar (fears over growth, risks to the economy, etc.) gold tends to rise. It's a bit like a heatsink in a portfolio. But hard to buy into on the back of such a strong rally.

I don't find much evidence that property's been a good diversifier. And I'd also say it's risen ahead of inflation for even longer than gold has. I think you get the appropriate property exposures from the stock market.

Actually, I don't really like bonds as investments. With my InvestEngine account, I play around with passive exposures. And my thinking is really this:

Risk-on:
VWRL

Defensive (options):
Consumer Staples
Healthcare
Energy
Utilities
Gold
Cash
TIPS

In long-term backtests, the combination of Consumer Staples, Healthcare and Energy has produced 60:40-like risk, with market-like (or market-beating) returns. But I think the key to defence is that circumstances and valuations change. So cash looks good now; bonds were terrible for years; TIPS look reasonable; healthcare's an expensive sector; etc. So one conclusion I came to is that no fixed asset allocation should ever have you buying anything illogically expensive. And QE did strange things to bonds prices.
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5 users thanked ben ski for this post.
Cm258 on 27/11/2024(UTC), Peanuts on 28/11/2024(UTC), Helen L on 28/11/2024(UTC), wydffart on 28/11/2024(UTC), Guest on 07/01/2025(UTC)
Cm258
Posted: 28 November 2024 07:45:01(UTC)
#36

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Changing topic, I see InvestEngine have launched their LifePlans. Managed by them, a collection of ETFs. Interesting. Let's hope my Crowdcube investment in them goes somewhere lol
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ben ski
Posted: 28 November 2024 23:00:05(UTC)
#37

Joined: 15/01/2016(UTC)
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It looks like one of these cases where they could use 2 ETFs, but use 14 just to justify their 0.25% fee.

The stocks are a mishmash of two S&P500 ETFs, a bunch of diluted factor exposures, FTSE100, Europe, EM... I've never found a good reason for doing that, above using a world index. There's no diversification benefit I'm aware of.
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2 users thanked ben ski for this post.
Cm258 on 29/11/2024(UTC), Peanuts on 29/11/2024(UTC)
Peanuts
Posted: 29 November 2024 07:31:31(UTC)
#38

Joined: 16/02/2019(UTC)
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ben ski;327174 wrote:
It looks like one of these cases where they could use 2 ETFs, but use 14 just to justify their 0.25% fee.

The stocks are a mishmash of two S&P500 ETFs, a bunch of diluted factor exposures, FTSE100, Europe, EM... I've never found a good reason for doing that, above using a world index. There's no diversification benefit I'm aware of.



I think the same can be said for LifeStrategy. Unnecessarily complicated although to be fair the price is cheap @ O.23% for someone who needs a one-stop portfolio that rebalances etc. It just pisses you off that Vanguard don’t do a service like pick 2 funds (VWRP and VAGS for example) and for 0.05% or whatever we will rebalance for you.
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1 user thanked Peanuts for this post.
ben ski on 29/11/2024(UTC)
Aminatidi
Posted: 29 November 2024 08:58:58(UTC)
#40

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Peanuts;327181 wrote:
I think the same can be said for LifeStrategy. Unnecessarily complicated although to be fair the price is cheap @ O.23% for someone who needs a one-stop portfolio that rebalances etc. It just pisses you off that Vanguard don’t do a service like pick 2 funds (VWRP and VAGS for example) and for 0.05% or whatever we will rebalance for you.


You could say the same of any multi-asset I guess?

I think it's easy to forget just how cheap 20bps actually is too - fees matter but I don't think 20bps is what the people writing the articles had in mind on fees.

Still interesting though how nobody seems to do a straight stock/bond mix with a few bps for managing it.
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1 user thanked Aminatidi for this post.
Cm258 on 29/11/2024(UTC)
Big boy
Posted: 29 November 2024 09:17:11(UTC)
#43

Joined: 20/01/2015(UTC)
Posts: 6,673
Aminatidi;327184 wrote:
Peanuts;327181 wrote:
I think the same can be said for LifeStrategy. Unnecessarily complicated although to be fair the price is cheap @ O.23% for someone who needs a one-stop portfolio that rebalances etc. It just pisses you off that Vanguard don’t do a service like pick 2 funds (VWRP and VAGS for example) and for 0.05% or whatever we will rebalance for you.


You could say the same of any multi-asset I guess?

I think it's easy to forget just how cheap 20bps actually is too - fees matter but I don't think 20bps is what the people writing the articles had in mind on fees.

Still interesting though how nobody seems to do a straight stock/bond mix with a few bps for managing it.


Sometime it’s better to buy dear rather than “cheap”.
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