I've got Scottish Mortgage in my SIPP and it's still -35% which is a significant improvement on where it was in 2022! Certainly a long term investment and my only regret is plowing so much into it prior to 2022 crash.
Interesting take on fund managers - 'believe in / agree with'. The problem is that an awful lot of them make a good case for their particular fund - almost 'salesman-like'. I tend to listen to what they say then look at their performance over 3 and 5 years in particular comparing it to a suitable index. It's suprising how the managers can 'talk the talk' but not many can 'walk the walk'.
I have 70% of my pf in a low cost global index tracker (HSBC All World) and 10% in WLDS (global small cap), but I also wanted a value tilt for the other 20%, for which I was prepared to pay a bit more for active management and good stock picking. I have been in Ranmore Global Equity and Dodge & Cox Global Equity for a year or so and not regretted it.
HG Capital Trust is an excellent compliment to a global tracker. Private equity exposure within the technology sector - expensive but has delivered excellent performances throughout the cycle over the last 25 years.
For a UK retiree, I would like to add City of London Investment trust. Ongoing charges 0.37%, total return has beaten benchmark FTSE all share over 1/3/5/10 years, has a dividend yield of 4.7% currently, and has increased its quarterly dividend every year since 1966 as I understand it. You could hold this and stop watching. Plus the UK market is still quite cheap unlike US
Funds like Scottish Mortgage and others that pay no or low dividends are fine in the accumulation stage. But the sequencing risk can be hard to stomach. The notion that you would need to sell shares to fund retirement income after a crash is not desirable. With an income generating investment like CTY this is not an issue
@@elephantandcastle838It is an issue, because dividends come out of their holdings which could be invested into buying the dip, and as a result, the fund takes much longer to recover. In ETFs, there's really no difference between capital gains and dividends.
I took a quick look at City of London IT, but it looks very poor to me. Performance is poor, over the last 10 years City had a total return of 70%, whereas the Vanguard FTSE All World ETF had a total return of 225%. The list of holdings shows it is underdiversified with too big a bias towards low growth, underperforming UK stocks. I don't believe in dividend investing, because it leads to exactly this sort of situation. As for the UK market currently being cheap relative to the US, that was also true 10 years ago.
CTY is an income product which suits the OP's needs as he's retired; indeed it's an excellent income fund which has increased its divi for decades which is what many retirees want. Any number of internationally diversified, growth-oriented ITs have outperformed your global ETF - MWY, SMT, JAM, MNKS, JGGI, POLR - amongst others. ETFs are always the lazy option and cheap fees generally don't equal success. @andydonaldson
Ramin, thanks for all the videos - great content. A topic which is of great interest to me is the relative merits of different UK investment accounts / vehicles (e.g. index funds in a GIA, VCTs, pension contributions beyond employer matching scheme, onshore/offshore bonds, property in a limited company) and the order in which these should be filled up after maxing out the ISA allowance. Separately, thought on lifetime ISA vs unmatched pension contributions? Thanks again!
All the Bailie Gifford run active growth funds including SMT have been rotating their holdings to a greater or lesser extent since 2022. Just a pity they didn't spot some of their mistakes - like oversized Tesla positions - a little earlier. It's going to take quite a while for those funds to fully recover, some are still underwater or barely up since pre-pandemic values. Part of the reason SMT is up is simply that the discount to NAV is finally pretty much gone.
The way I do this is my company pension is with Scottish widows, who were quite hard to swap and change funds with, so that’s just in trackers (approx 80% of my savings), my ISA is split between Funsmith, SMT, PHI, IEM, Jupiter India and a bit of Rolls Royce, even there I invest in fundsmith directly now with the rest through ii, to try and reduce my urge to fiddle with things! Be honest with your own personality 😅
@@SuperMiloBass Yes, it was an intentional play on words. You can't actually invest in the index, only funds that track the index. Also there are lots of other funds that might make more appropriate investments than simply the bog standard S&P funds.
My ethical active funds have been underperforming for the last year or so until this month when they really took off for some reason, (not looked into why yet) 🤣 For me active is worth the fee as I want the fund manager to provide ethical stewardship although I’m consistently tempted to just build an ethical ETF myself as I’m well aware of the impacts of fees… If I’m investing ethically I find it easier to stick through the losses
Hi @Alberto-di7lx the best source I've found is the S&P Index Versus Active (SPIVA) report from S&P Dow Jones indices www.spglobal.com/spdji/en/research-insights/spiva/ There's a paper by Beath in 2022 www.imcoinvest.com/pdf/research/CEM-Benchmarking-Report_A-Case-For-Scale-February-2022.pdf that suggests the largest managers ($10 billion plus in assets under management) can outperform slightly net of fees which contradicts the SPIVA results. The study says "Analysing nearly 9,000 observations from 1992-2020, we find the average fund in the CEM database has outperformed their benchmark by 67 basis points (bps) gross of costs and 15 bps net of costs". I think the costs are the biggie here i.e. they gobble up three quarters of the alpha according to that study. Thanks, Ramin.
Crikey, SMT is your favourite active?!? Lost something like 60% + peak to trough. If something falls that much when the rest of the market doesn't, history suggests that it will take years, even decades to recover, even in nominal terms, if it does at all. Complete hopium trust. Tech wreck the sequel. If I were to buy an active , it would be a sensible, old, globally diversified investment trust on an unusually wide discount. FCIT comes to mind, as does BNKR.
Alliance I like, allthough its a smidge tech heavy and I'd prefer to buy it on a juicer discount than it's on today. I love how different AVI is! If you are looking for a genuine diversifier within the equities asset class then this is certainly it, although defo not a core holding. Too off the wall for that! JP Morgan Global Growth and Income gets misunderstood too often for my liking. Its by far the most popular IT amongst friends who invest, but I've no idea why! Because these are youngish to young middle aged guys, and JGGI is basically a quality growth Trust in drawdown! Why buy a bunch of large cap growth, only for the trust to then return some of it as cash a few times a year, meaning reinvestment of dividends which comes with dealing costs and stamp duty? But as a drawdown tool/rebalancing tool, yes I get it.
Ramin, this tip isn't for your Active Funds video (sorry!). I'm listening to the podcast with Tyler from PortfolioCharts and it's riveting stuff, well done on that episode, bring him back sometime!
Risk adjusted returns? Active stock picking funds are probably a waste of money. Funds that actually do something different like BLNDX to manage risk and environment could be worth the fee.
Along with an index fund? I hope you don't put too much into 'total return' or 'wealth preservation' trusts. They are marketed as safe ports of storm for nervous investors against volatility and inflation. The reality is that the majority have massively underperformed both global equities over the long-term - cash in a high-interest account over the last 3 years and will have lost you money in real terms against inflation. To cap it off - they charge expensive management fees.
@@WilliamBrown-e3t I don't have an index fund but I have lots of dry powder in short-dated gilts so maybe soon. CGT and PNL can get out of synch but both have decent LT returns with low volatility so are ideal for my current needs.
@@WilliamBrown-e3t I don't have an index fund at present. I'm holding lots of dry powder in short-dated gilts, some of which might be deployed in that direction when equities are more reasonably priced. PNL and CGT can get out of synch with markets but in the LT they do well with low volatility which is what I want. I'm not concerned about a 3 year time horizon.
Active fund figures aren't correct. Jpm global growth and income has made 110% over last 5yrs including dividends, your fig is 75% - have you missed out dividends of them all?
from KIID... "The impact of the management fee payable to the Trust's investment manager (0.29%), the Trust's other administrative expenses (0.05%), the costs of borrowing money to invest, including interest and arrangement fees (0.53%) but not any income or capital benefit of doing so and the ongoing costs of any underlying investments in funds within the Trust's portfolio (0.01%). " so really the management fee is 0.29%, 0.53% is interest cost which boost returns in good times, and the rest admin etc. to me the most relevant figure is 0.88-0.53 = 0.35%. their website shows 0.34% though so that's probably why that screenshot shows it rounded down to 0.3%. that's a month later info i think.
if you sort your comments by new my comment will appear explaining the difference. basically a big chunk of your figure is loan interest but since the money borrowed generates a return it really should not count. bug in youtube hides the approved comment reply when sorted by popularity.
@@blumousey Hi - I don't dislike it. I prefer the T212 interface, T212 has much lower Fx fees and I have to pay a fee with Freetrade for a Stocks and shares ISA. I tried Ft, but in the end I settled for Invest Engine and T212. Not a big thing.
@@coderider3022 Agreed. The language was not the sort of language Ramin uses. I suspect he had to read their pre-prepared script. But, I don't know. It's all about earning a living. We do what we must.
Hi Ramin! Are there any statistics if actively managed funds (not ETF) with higher risk (reported in the risk indicator from 1 to 7 in the KID) can beat the market (MSCI World/ACWI)? Just as an example: I live in the European Union, so the information I have written in the KID may be different from the rest of the world. LU1278917452 has a risk of 5 (suggested holding period 7 years) LU1048657123 has a risk of 5 (suggested holding period 4 years) MSCI World/ACWI has a risk of 4 (suggested holding period 5 years) Both LU1278917452 and LU1048657123 beat the market in the last 5 years. In other words, if I choose a riskier actively managed fund, do I have more chance to beat the market (MSCI World/ACWI)? Of course I must be willing to risk more losses. Thank you!
Hi @@Alberto-di7lx SPIVA doesn't adjust for the riskiness of the fund. It does break down funds by sector and country and so _indirectly_ that is also a measure of risk. For example if it's an EM equity fund that will be higher risk (also higher volatility) than a developed market equity fund. And in the case of EM funds there's not much evidence that active funds can outperform despite the argument that these markets are less liquid and should have more inefficiencies. There was a recent study that looked at the size of funds and found that larger ones (more than $10 billion in assets under management) are more likely to outperform net of fees www.imcoinvest.com/pdf/research/CEM-Benchmarking-Report_A-Case-For-Scale-February-2022.pdf Thanks, Ramin.
@@Pensioncraft could you also answer my first comment, please? Thank you! "Are there any statistics if actively managed funds (not ETF) with higher risk (reported in the risk indicator from 1 to 7 in the KID) can beat the market (MSCI World/ACWI)? Just as an example: I live in the European Union, so the information I have written in the KID may be different from the rest of the world. LU1278917452 has a risk of 5 (suggested holding period 7 years) LU1048657123 has a risk of 5 (suggested holding period 4 years) MSCI World/ACWI has a risk of 4 (suggested holding period 5 years) Both LU1278917452 and LU1048657123 beat the market in the last 5 years. In other words, if I choose a riskier actively managed fund, do I have more chance to beat the market (MSCI World/ACWI)? Of course I must be willing to risk more losses. Thank you!"