IanTHughes wrote:Lootman wrote:A simple investment in a S&P 500 tracker like SPY over the same time period would now give you an investment worth almost exactly £200,000, compared with less than £150,000 for HYP1, before FX. Throw in the FX rate changes and that is £230,000. That is more than 50% more than HYP1.
So, you are correct, and well done, an investment within the S&P index with dividends re-invested, would have beaten HYP1, when measured by total return
You asked for a fund with a superior return to HYP1 and I showed you one. In fact I showed you dozens since any index fund based on that and some other related indices would have given very similar returns.
If you think running a HYP is easier than running a single fund then fine, although personally I cannot see how 15 or 20 holdings along with their corporate actions is easier than holding a single diversified fund.
As for FX risk you have that either way, as UK companies earn most of their earnings overseas as do many US companies. With HYP1 I would be far more worried about the risk of having 80% of the income dependent on a handful of shares, as IAAG showed.
As for cost, major market index funds are approaching zero costs in some cases, and are getting cheaper all the time.
And then there is the income. Well you can work that out for yourself since the S&P 500 has typically yielded between 2% and 2.5%, although it is a little lower now since the US market is at an all-time high, unlike the UK market. But of course there are more ways of drawing funds from a portfolio than limiting yourself to the mere receipt of dividends. In the end a higher total return will give you more income (or more accurately, higher cashflows) because the pot is bigger, over 50% bigger in this case.
Anyway there is something of a Catch-22 here. If HYP1 is beaten on capital you will say "capital doesn't matter", only the income matters. But then when HYP1 loses 47% of its income year-on-year, there is crowing about its capital performance instead.
Although I do give Pyad credit for publishing the report this year. Given its horrific losses, I had a feeling he might duck and cover instead.