adrianc
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Post by adrianc on Nov 3, 2021 11:22:46 GMT
Having got shot of a massively underwhelming "safe" savings account, I'm looking to get a better return from the money...
I cannot be bothered with the merry-go-round of shifting between this weeks' half-decent return savings account, only for it to dip back to risible levels next week, so I'm thinking of adding it to the ETF pot. And that begs the question of where to diversify further...
Currently, there's a mix of low-cost index trackers:
UK - FTSE250 & FTSE AllShare
Europe - STOXX600 & FTSE Dev Eur Ex UK
RoW - FTSE All World, FTSE All World High Div, FTSE Dev World Ex UK
(yes, there probably is a bit of duplication on the RoW side)
What suggestions do you have for a direction that's a bit more on the low-risk side but still with reasonable return prospects? (and, yes, I am aware of that inherent contradiction!)
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easynow
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Popcorn anyone?
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Post by easynow on Nov 3, 2021 11:56:48 GMT
what do you call "reasonable returns" ??
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agent69
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Post by agent69 on Nov 3, 2021 12:05:18 GMT
what do you call "reasonable returns" ?? Something that doesn't have a minus symbol in front of it?
adrianc - if you find an answer please let me know because I'm in a similar position.
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adrianc
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Post by adrianc on Nov 3, 2021 12:06:11 GMT
what do you call "reasonable returns" ?? Considering this is money that's been languishing at 0.3%...
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easynow
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Popcorn anyone?
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Post by easynow on Nov 3, 2021 12:09:30 GMT
One I consider to be pretty safe is Royal London Sterling Extra Yield Bond, not an ETF as such, but has always been a good one for me with a nice steady 6% return
(i'm sure many on here will wave their arms in the air with opposing opinions)
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registerme
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Post by registerme on Nov 3, 2021 12:23:32 GMT
I'm not a fan of ETFs, but that aside a while back I started to build out a portfolio. My starting point was to look at global GDP by country. My aim is to create a portfolio that roughly matches that and that is relatively diversified by industry / asset / country / region. I realise that I could do this a lot more simply by buying a "world index" or the like, but my approach is a) more fun, b) allows me to take a more directional approach when I think it appropriate and c) allows for more fidelity in re-balancing when necessary. 1. FTSE (done - useful Brexit hedge). 2. FTSE 250 (done - useful if Brexit doesn't go badly lol). 3. Europe ex UK tranche 1 (done) 4. EMG (done) 5. S&P 500 6. NASDAQ 7. Nikkei 225 7. China 8. Asia ex Japan and China 10. Europe ex UK tranche 2 11. Global Corporate Bond 12. Global High Yield Bond 13. Commodities ETF? 14. UK Gilts 15. US T-bills If I actually achieve this I will end up overweight UK and underweight US and China, but... I'm ok with that, at least as a starting point. If I can buy on the dip I will (but timing blah blah). The problem is that everything is expensive, and we're about to see the start of tapering / the end of QE / the start of interest rate rises. Add to which continued uncertainty around Brexit and COVID. EDIT: Oh, and big geopolitical risks like the possibility of China invading Taiwan  . So I guess you pays your nickel and takes your chance. EDIT2: sorted out the numbering (which shouldn't be taken as a priority ordering). |
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Post by overthehill on Nov 3, 2021 13:22:32 GMT
I'm not a fan of ETFs, but that aside a while back I started to build out a portfolio. My starting point was to look at global GDP by country. My aim is to create a portfolio that roughly matches that and that is relatively diversified by industry / asset / country / region. I realise that I could do this a lot more simply by buying a "world index" or the like, but my approach is a) more fun, b) allows me to take a more directional approach when I think it appropriate and c) allows for more fidelity in re-balancing when necessary. 1. FTSE (done - useful Brexit hedge). 2. FTSE 250 (done - useful if Brexit doesn't go badly lol). 5. Europe ex UK tranche 1 (done) 9. EMG (done) 3. S&P 500 4. NASDAQ 6. Nikkei 225 7. China 8. Asia ex Japan and China 10. Europe ex UK tranche 2 11. Global Corporate Bond 12. Global High Yield Bond 13. Commodities ETF? 14. UK Gilts 15. US T-bills If I actually achieve this I will end up overweight UK and underweight US and China, but... I'm ok with that, at least as a starting point. If I can buy on the dip I will (but timing blah blah). The problem is that everything is expensive, and we're about to see the start of tapering / the end of QE / the start of interest rate rises. Add to which continued uncertainty around Brexit and COVID. EDIT: Oh, and big geopolitical risks like the possibility of China invading Taiwan . So I guess you pays your nickel and takes your chance.
Do you mean 9. ESG ?
I invested in quite a few funds with 'sustainable' in the title about a year ago. Not many russian or chinese companies in these funds, their governments have other agendas which by all accounts are somehow miraculously starting to converge as exposed by COP26. British Aerospace might be a good stock to buy.
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registerme
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Post by registerme on Nov 3, 2021 13:31:29 GMT
Naah, I meant EMG for emerging markets, but my fluffing of the ordering probably didn't help (I'll go back and edit it to clear that up).
But yeah, I've been thinking there might be space for a "green" fund of some kind in there. I'll read the relevant threads again / more closely when / if I start to think seriously about that.
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Post by Deleted on Nov 3, 2021 13:42:09 GMT
Can you provide exact risk and target income/capital growth objectives please?
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corto
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one-syllabistic
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Post by corto on Nov 3, 2021 13:46:13 GMT
If you want to go from savings accounts to equity and play it safe, it doesn't seem to a be a particularly safe idea to go 100% equity right away.
There are many (usually mutual) funds available that provide a mix of shares and bonds at different ratios.
Vanguards Life Strategy funds are probably the most well known examples.
These are mixtures of other Vanguard funds (including index trackers) at 20,40,60,80,100 percent equity content.
You could alternatively just buy a (Vanguard or other) World Equity Tracker and a bond fund (eg Global Bond Index tracker) at the desired mix / risk level yourself; that avoids some (low) management costs.
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Post by overthehill on Nov 3, 2021 14:41:26 GMT
Naah, I meant EMG for emerging markets, but my fluffing of the ordering probably didn't help (I'll go back and edit it to clear that up). But yeah, I've been thinking there might be space for a "green" fund of some kind in there. I'll read the relevant threads again / more closely when / if I start to think seriously about that. EM - emerging markets ! Just having green, sustainable or clean in the title can suck in large amounts of money due to trend investing irrespective of the funds merits or performance. Generally good news for the fund/trust/ETF price but not always as still has to be invested in a rising star not a sinking ship.
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registerme
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Post by registerme on Nov 3, 2021 17:19:24 GMT
You're absolutely right! And thank you for correcting me. Spending twenty years working with / for the Emerging Markets Group of an IB obviously introduced an utterly fossilised brain-fart on my part. How embarrassing, but also amusing  .
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michaelc
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Post by michaelc on Nov 3, 2021 17:35:13 GMT
Having got shot of a massively underwhelming "safe" savings account, I'm looking to get a better return from the money... I cannot be bothered with the merry-go-round of shifting between this weeks' half-decent return savings account, only for it to dip back to risible levels next week, so I'm thinking of adding it to the ETF pot. And that begs the question of where to diversify further... Currently, there's a mix of low-cost index trackers: UK - FTSE250 & FTSE AllShare Europe - STOXX600 & FTSE Dev Eur Ex UK RoW - FTSE All World, FTSE All World High Div, FTSE Dev World Ex UK (yes, there probably is a bit of duplication on the RoW side) What suggestions do you have for a direction that's a bit more on the low-risk side but still with reasonable return prospects? (and, yes, I am aware of that inherent contradiction!) Hope I'm not teaching my grandmother to suck eggs and quite possibly you know much more than me BUT: My question with any asset that isn't a direct stock is do I understand it? If I invest £100 (round number) into your UK ETF how much will I have invested in AstraZeneca (for example) ? How much of that £100 goes into something that isn't a stock (fees, taxes etc). What about dividends? What happens if the folks that run the ETF go bust? Then what about the same for the equivalent fund. I'm sure you know all this. I don't understand them (so be grateful for answers) so don't like ETFs for that reason. I mean I've read the theory but its not quite the same as nuts and bolts hence I'd want to know it in terms of my mythical £100 investment.
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michaelc
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Post by michaelc on Nov 3, 2021 17:37:56 GMT
If you want to go from savings accounts to equity and play it safe, it doesn't seem to a be a particularly safe idea to go 100% equity right away. There are many (usually mutual) funds available that provide a mix of shares and bonds at different ratios. Vanguards Life Strategy funds are probably the most well known examples. These are mixtures of other Vanguard funds (including index trackers) at 20,40,60,80,100 percent equity content. You could alternatively just buy a (Vanguard or other) World Equity Tracker and a bond fund (eg Global Bond Index tracker) at the desired mix / risk level yourself; that avoids some (low) management costs. Maybe I should create a new thread for it by why is Vanguard so popular ? There are many other managers out there so why does one always seem to come top?
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macq
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Post by macq on Nov 3, 2021 17:39:11 GMT
If you want to go from savings accounts to equity and play it safe, it doesn't seem to a be a particularly safe idea to go 100% equity right away. There are many (usually mutual) funds available that provide a mix of shares and bonds at different ratios. Vanguards Life Strategy funds are probably the most well known examples. These are mixtures of other Vanguard funds (including index trackers) at 20,40,60,80,100 percent equity content. You could alternatively just buy a (Vanguard or other) World Equity Tracker and a bond fund (eg Global Bond Index tracker) at the desired mix / risk level yourself; that avoids some (low) management costs. In the same vain,within the last year Blackrock launched 3 multi-asset ETF's (MACG/MAMG/MAGG) which i believe are the first on the market
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