The Lemon Fool

Here is an interesting interview with a couple of the chief van guards:

https://www.youtube.com/watch?v=sppXXFwVWTk

It is worth noting that both of the van guards spoke very favourably of a global tracker for the equity part of a portfolio. Th home bias in LifeStrategy was said to be there for marketing reasons. They also favoured a global bond fund for the bond part of a portfolio.

An interesting video, thanks for sharing the link.

27:35mins....Vanguard's view for the UK, seems positive.

@monabri: Vanguard seem positive on the U.K. market rather than on the U.K. Perhaps I’m being pedantic in which case I apologise. I think there is a real and important difference between the U.K. market and the U.K.

Best wishes,

Steve

Steveam wrote:@monabri: Vanguard seem positive on the U.K. market rather than on the U.K. Perhaps I’m being pedantic in which case I apologise. I think there is a real and important difference between the U.K. market and the U.K.

Best wishes,

Steve

Yes, and probably worth exploring. Is the thought that:

( UK Market)

- Sterling will decline further making UK goods effectively cheaper around the World

Thus

- Certain UK companies, still recovering from Covid induced hangover, will be snapped up ( pushing up their market price)

These UK companies being those that have a

- Bias towards the global FTSE100 Companies, which operate globally expected to recover but smaller, predominantly UK market companies, to not do so well (wage increases, labour & material shortages, competition from abroad ).

Versus

( UK as a country)

- A general inability of the UK government to react sensibly and proactively in a timely manner will hinder "Brexit Britain "?
- increased taxation , debt bubble
- shortage of cheap labour driving up

I'm not that optimistic for "market" nor "country".

For a long time the UK was second only to the US in long term returns since 2008 (and arguably before) growth and tech have been in the ascendency the FTSE100 is a large cap index. Personally I've favoured UK small caps for a long time and they have done very well even through recent years (and small cap ITs were oversold over BREXIT fears). I think UK small caps are likely to remain a good buy. For UK large caps to succeed we need a lasting style rotation. This is indeed possible and everyone has recently noticed that commodities are valuable. Also rising inflation may well be good for cyclical UK companies such as utilities, miners, and oil majors especially if demand outstrips supply in a recovering and struggling global supply chain.

I would love the UK government to adopt policies that encouraged a thriving tech sector that could produce future UK large caps.

Finally the UK is one market where active managers have done a bit better than elsewhere in the world.