Re: Put your mouth where your money is!
Posted: August 13th, 2020, 1:23 pm
If anyone wants to follow my equity investment strategy, just look at a global index as that is a reasonable benchmark. Not perfect as I overweight a few strategies, some performing well, others less so, but a global index is close enough. I think it totally reasonable to say the returns from a global index are free of hindsight bias as well. Global indexes are usually priced in dollars though and there is usually some drag involved with index trackers, so for real life TR tracking in pounds, I would suggest looking the iShares accumulating ETF SWDA (ISIN IE00B4L5Y983). It has a 10 year CAGR of about 12.2%. SWDA does not include emerging markets though, which currently makes up about 10% of the global market. Vanguard's VWRL does include emerging markets, but is not an accumulating ETF and reports performance in dollars. VWRL has only been going 8 years, but tracks its benchmark very closely. Vanguard provide a 10 year TR to the end of July for the benchmark of 133%. The pound has dropped from $1.5685 to $1.3085 during that period, giving a GBP equivalent TR of about 10.8% pa.
I cannot easily provide return figures for my other strategies as I don't track formally them. I am not prepared to go digging into old records to try and create some kind of TR figures. These figures would be unlikely to be of any value to anyone anyone as the risks I have taken to achieve them would need to be taken into consideration.
GS makes a very good point about strategies evolving. My opportunistic/derivatives trading portfolio has changed considerably over the last 10 years. For example, I used to trade FX options a great deal, but have not done that for 5 years. Fixed income investing is I think very likely to change from now on as well. I no longer invest in long duration government bonds. The coronavirus has flattened what remained of the yield curves, accelerating returns to the extent that I no longer consider the assset class worth the risk and have sold my US Treasuries ETFs. Substantial future returns are not impossible, but I consider it far more likely they will be mediocre from now on. Short duration still has its place as a portfolio stabiliser and foreign currency diversifier, but again returns are likely to be poor. For high yield I am seeing fewer and fewer worthwhile investment opportunities and question whether I should continue to hold on to some of my existing positions. Many HY bank securities have been and are increasingly being called/redeemed. Their replacements are difficult to access by retail investors and even if that was not the case, I don't like the risks associated with them (some are more risky than holding the ords IMHO). Coronavirus may throw up some more HY opportunities in the next year or so. If not, I will need a rethink. Perhaps increasing my equity allocation.
I cannot easily provide return figures for my other strategies as I don't track formally them. I am not prepared to go digging into old records to try and create some kind of TR figures. These figures would be unlikely to be of any value to anyone anyone as the risks I have taken to achieve them would need to be taken into consideration.
GS makes a very good point about strategies evolving. My opportunistic/derivatives trading portfolio has changed considerably over the last 10 years. For example, I used to trade FX options a great deal, but have not done that for 5 years. Fixed income investing is I think very likely to change from now on as well. I no longer invest in long duration government bonds. The coronavirus has flattened what remained of the yield curves, accelerating returns to the extent that I no longer consider the assset class worth the risk and have sold my US Treasuries ETFs. Substantial future returns are not impossible, but I consider it far more likely they will be mediocre from now on. Short duration still has its place as a portfolio stabiliser and foreign currency diversifier, but again returns are likely to be poor. For high yield I am seeing fewer and fewer worthwhile investment opportunities and question whether I should continue to hold on to some of my existing positions. Many HY bank securities have been and are increasingly being called/redeemed. Their replacements are difficult to access by retail investors and even if that was not the case, I don't like the risks associated with them (some are more risky than holding the ords IMHO). Coronavirus may throw up some more HY opportunities in the next year or so. If not, I will need a rethink. Perhaps increasing my equity allocation.