markus;45787 wrote:Jeff Liddiard;45759 wrote:
The problem I see with trackers, as examples, Lifestrategy 100% = 52% return over 3 years (Trusnet figures), LS 80% 44%, FTSE All World VWRL 56% which are, I accept, reasonable returns, but Funsmith is 99% and SMT is 91%. So there does appear to be more to be had with these two very popular managers.
you're never going to shoot the lights out with funds like Lifestrategy, but you may get a smoother ride over alonger time period & not get stuck in a dog of a fund wondering whether to wait for it to turn around or ditch it & risk moving into another dog of a fund.
How much longer can the managers keep generating those returns in Fundsmith, SMT?
Which fund will set you up for the next 50-90% return over 3 yrs?
nobody knows for sure
I'm trying to move my pot so its largely comprised of Lifestrategy with the remainder in low cost funds/IT
The big problem Lifestrategy solves is investor behaviour..
If Fundsmith and SMT are due periods of underperformance (and long-term, no sector really edges ahead of any other), then chances are you hold on waiting for performance to turn around; the media starts asking "Has x lost his touch?"; the fund drops its star ratings; no one's recommending it anymore; and you're either selling, or you're buying what's been doing well for the past 5 years..
This constant rotation into yesterday's winners defines active fund investing, and means most investors underperform the likes of Lifestrategy by far more than they realise.
The problem with Lifestrategy is it's concentrated in the two most expensive asset classes: US equities and treasuries (the two most heavily trafficked parts of the market)..
The question is whether there's any benefit tilting away from the market (e.g. towards Value, Small-caps, Emerging Mkts or Private Equity) or risk's priced correctly? .. I'd perhaps consider 5-10% in Gold – quarterly rebalance – with a Lifestrategy fund, and maybe the same Private Equity.