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FTSE 100 vs 250 tracker....???
Mark Anderson
Posted: 02 April 2018 20:27:57(UTC)
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I was just look at some graphs of the performance of a FTSE100 vs FTSE250 tracker over a 20 year period and it seems that the 250 has performed better throughout that entire period

Bit of a simple question: Why would anyone invest in a FTSE100 tracker rather than a FTSE250 tracker???
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Harry Trout on 03/04/2018(UTC)
markus
Posted: 02 April 2018 20:49:58(UTC)
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Mark Anderson;60018 wrote:
I was just look at some graphs of the performance of a FTSE100 vs FTSE250 tracker over a 20 year period and it seems that the 250 has performed better throughout that entire period

Bit of a simple question: Why would anyone invest in a FTSE100 tracker rather than a FTSE250 tracker???



if you wanted a higher yield at minimal cost then ishares 100 (ISF) would give you these vs their 250 (MIDD) tracker.
King Lodos
Posted: 02 April 2018 20:54:13(UTC)
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I think the 100's done better over longer periods.

Past performance tells you virtually nothing about future performance.

Whether domestic-facing or global-facing UK stocks do better over the next 20 years (or do well at all) comes down to macroeconomic factors, as well as how many people are already in those trades .. But I'd say they're both very niche trades .. The only real passive options are World index and US index .. Otherwise it's a specific bet on a fairly small economy
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Tim D on 02/04/2018(UTC)
Alan Selwood
Posted: 02 April 2018 22:52:46(UTC)
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"Elephants don't gallop" is a famous saying.
Tim D
Posted: 02 April 2018 23:43:30(UTC)
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Mark Anderson;60018 wrote:
I was just look at some graphs of the performance of a FTSE100 vs FTSE250 tracker over a 20 year period and it seems that the 250 has performed better throughout that entire period

Bit of a simple question: Why would anyone invest in a FTSE100 tracker rather than a FTSE250 tracker???


Uh.. because past performance is no guarantee of future performance and if you invested in the FTSE250 now you'd just be "performance chasing"?

Having said that... I fully intend to put some of this years ISA money into an FTSE250 tracker :^)
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King Lodos on 03/04/2018(UTC)
Mark Anderson
Posted: 03 April 2018 02:08:22(UTC)
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Tim D;60029 wrote:
Mark Anderson;60018 wrote:
I was just look at some graphs of the performance of a FTSE100 vs FTSE250 tracker over a 20 year period and it seems that the 250 has performed better throughout that entire period

Bit of a simple question: Why would anyone invest in a FTSE100 tracker rather than a FTSE250 tracker???


Uh.. because past performance is no guarantee of future performance and if you invested in the FTSE250 now you'd just be "performance chasing"?

Having said that... I fully intend to put some of this years ISA money into an FTSE250 tracker :^)


King Lodos makes, I think, a good and very valid point above regarding US and World indexes. Will you be putting some of this years ISA money into those markets and if not, why not?
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King Lodos on 03/04/2018(UTC)
Harry Trout
Posted: 03 April 2018 07:43:18(UTC)
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Here is a chart of FTSE 100 v 250 as far as I was able to go back on Trustnet. The FTSE 250 was founded in 1984 so it pretty much covers the full historical comparison:

030418 FTSE 100 v 250

If you wanted to go active I like Old Mutual UK Mid Cap. Over the 10 calendar years from 2008 to 2017, the annualised return of the FTSE 250 was 9.9%, Old Mutual UK Mid Cap was 14.6%.
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Inderpal Singh Khalsa on 14/04/2018(UTC)
Apostate
Posted: 03 April 2018 07:56:49(UTC)
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With 30% of the FTSE 250 in investment trusts is there any merit in seeing it as a kind of hybrid global equity/UK equity fund. Maybe throw in a S&P 500 tracker and that's all one really needs? Or is this stretching it a bit?
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Mark Anderson on 03/04/2018(UTC)
Tim D
Posted: 03 April 2018 09:16:08(UTC)
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Mark Anderson;60030 wrote:
Tim D;60029 wrote:

Having said that... I fully intend to put some of this years ISA money into an FTSE250 tracker :^)


King Lodos makes, I think, a good and very valid point above regarding US and World indexes. Will you be putting some of this years ISA money into those markets and if not, why not?


Yes, my "default option" these days would/should be to simply add the lot into my core Vanguard Lifestrategy or L&G multi-tracker holdings... but (besides the fact those are kind of boring and I enjoy fiddling around on the periphery) I find myself influenced by some of the interesting discussion of "quality" on this forum and leaning towards picking up some IWFQ (iShares MSCI World Quality Factor ETF) this time. Would pair that with an equal amount in some high credit quality bond ETF to try and keep my asset allocation from drifting off too much.

Last year I spread my ISA funds across iShares' "thematic" ETFs DRDR/RBTX/DGIT/AGES... still up 18%/15%/8%/1% despite the ongoing tech wreck. But also made a small top-up to PNL, which is down 5% since. This year I'm thinking a 4-way split IUKP/VMID/IWFQ/<some short-dated gilts&treasuries thing> but nothing's certain until the dealing orders are submitted.
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Mark Anderson on 03/04/2018(UTC)
King Lodos
Posted: 03 April 2018 11:57:36(UTC)
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Size is a factor .. Traditionally, smaller companies have outperformed.

FTSE 100 vs 250 vs Marlborough Special Situations (because as you get smaller, the arguments for active probably get stronger .. certainly no doubt with the AIM market, which makes nothing, passively).

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

In the US, Small-cap Value has obliterated the S&P500 since the 70s/80s.

But whether things like the Small-cap anomaly still exist is difficult to prove .. Usually, when the cat's out the bag, the edge is arbitraged away .. Some funds (like F&C Equity Mkt Neutral) go long Small-caps, short Large-caps, with lots of leverage, and it slightly flattens the value difference between them .. and it could even go the other way, and small-caps can become persistently overvalued (as they might be now in the US).

The strongest anomaly (apart from momentum) is Value .. And there's a lot of doubt over whether the Value anomaly still exists – and not many of us piling into Banks, Miners and Oil companies .. SMT would be the biggest bet against everything that's worked in the past – but then the economy of the future might look completely different .. I still wouldn't buy a FTSE 100 or All Share tracker (which is mostly EM exposed anyway) – while the 250 would be a fine way to bet on the UK
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Harry Trout on 03/04/2018(UTC), Tim D on 03/04/2018(UTC), Mark Anderson on 03/04/2018(UTC), Inderpal Singh Khalsa on 14/04/2018(UTC)
Tony Peterson
Posted: 12 April 2018 19:59:31(UTC)
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Nothing could illustrate better how graphs, like statistics, can be used as drunkards use lamp posts - for support rather than illumination.

I have been able almost (but not quite) to match Marlborough Special Situations using almost exclusively direct shareholding in FTSE 100 companies.

Can our resident artist explain how this is possible`?

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Freddy4Skin on 12/04/2018(UTC), Mickey on 13/04/2018(UTC)
King Lodos
Posted: 12 April 2018 20:40:30(UTC)
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Tony Peterson;60533 wrote:
I have been able almost (but not quite) to match Marlborough Special Situations using almost exclusively direct shareholding in FTSE 100 companies.

Can our resident artist explain how this is possible`?


I'd always start with Occam's Razor: the simplest explanation is usually the best.

To which I'd answer you the same way I'd answer those claiming to have seen a ghost or been abducted by aliens: you're mistaken.

Calculating one's own returns is a complex problem, for which there's no adequate solution .. Case in point: Marlborough Special Situations won't have made anything like the returns their chart shows, because those are hypothetical (time-weighted) returns .. And if you don't understand why that's a problem, you can't be relied upon to calculate your own returns .. Your holding of GSK alone makes achieving the returns you claim (even with early investments in Apple and Amazon) very unlikely
Harry Trout
Posted: 13 April 2018 06:00:50(UTC)
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King Lodos;60535 wrote:
Calculating one's own returns is a complex problem, for which there's no adequate solution ..

I don't find it difficult to calculate my returns. I calculate the compound annualised growth rate CAGR for every one of my investments (OEIC, IT, shares) in a separate spreadsheet which can cater for income. I also keep overall portfolio CAGRs. King Lodos, could you clarify please?

King Lodos;60535 wrote:
Marlborough Special Situations won't have made anything like the returns their chart shows, because those are hypothetical (time-weighted) returns .. And if you don't understand why that's a problem, you can't be relied upon to calculate your own returns ..

I don't understand what you are meaning here, again could you clarify please?

Many thanks

Harry
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Mickey on 13/04/2018(UTC)
philip gosling
Posted: 13 April 2018 06:42:09(UTC)
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Harry Trout

One explanation Time weighted returns is at

http://www.marottaonmone...internal-rate-of-return/
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Harry Trout on 13/04/2018(UTC)
Joe Soap
Posted: 13 April 2018 07:00:19(UTC)
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Well, I don't have much to contribute to this thread but anyone trying to detract from Marlborough S S fund is deluding themselves. I have been invested in this fund for my kids from a very young age (almost 20 years now) and I can categorically assure any potential investors that the performance of the fund has been very real indeed. My kids SIPP accounts are proof enough of that. We still hold this fund along side Fundsmith, Chelverton Growth and Buffetology.
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Mickey on 13/04/2018(UTC), Hank Elvis Dobbs (texan) on 13/04/2018(UTC), dlp6666 on 13/04/2018(UTC), Tim D on 13/04/2018(UTC), Guest on 14/04/2018(UTC), Harry Trout on 16/04/2018(UTC)
Harry Trout
Posted: 13 April 2018 07:41:35(UTC)
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philip gosling;60541 wrote:
Harry Trout

One explanation Time weighted returns is at

http://www.marottaonmone...internal-rate-of-return/

Thanks Philip. The Trustnet chart posted by King Lodos in this thread shows 281.7% return over 10 years. Is King Lodos saying that £1,000 invested 10 years ago now be worth something different to £3,817?
Aminatidi
Posted: 13 April 2018 07:51:04(UTC)
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I still don't honestly get the disagreements on threads like this.

If people have the skills to make good returns off individual stocks fair play and good luck to them.

Personally, I can maybe hope one day I do, but as it is I know I don't so I entrust the Smiths, Trains and Ashworth-Lords of the industry to hopefully do better with my money than I can.

It simply seem a matter of approaches v "right" and "wrong" ways to do things.
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Guest on 14/04/2018(UTC), Mike L on 14/04/2018(UTC)
Hank Elvis Dobbs (texan)
Posted: 13 April 2018 08:33:47(UTC)
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Joe Soap;60542 wrote:
Well, I don't have much to contribute to this thread but anyone trying to detract from Marlborough S S fund is deluding themselves. I have been invested in this fund for my kids from a very young age (almost 20 years now) and I can categorically assure any potential investors that the performance of the fund has been very real indeed. My kids SIPP accounts are proof enough of that. We still hold this fund along side Fundsmith, Chelverton Growth and Buffetology.



...I'm RICH...
dlp6666
Posted: 13 April 2018 09:09:49(UTC)
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Joe Soap;60542 wrote:
... anyone trying to detract from Marlborough S S fund is deluding themselves. I have been invested in this fund for my kids from a very young age (almost 20 years now) and I can categorically assure any potential investors that the performance of the fund has been very real indeed


But do you think this excellent fund has now run out of puff [Giles Hargreave is now 70], or is currently just pausing for breath?
Tom Bards
Posted: 13 April 2018 11:49:03(UTC)
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Wouldn't all the investment trusts in the FTSE250 increase the charges substantially? A lot of the trusts in the FTSE250 are extortionate. I don't know how this affects the tracker so I'm genuinely asking.
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