The Lemon Fool

The charts are not very helpful when tring to compare against other strategies. Do they publish daily unit prices anywhere?

I'll research and get back.

I thought Morningstar or Bloomberg, but appears to be Australian namesakes on the latter.

Meerkat wrote: I've never understood 'simulated historic returns':

You know what your portfolio is, you project back what it would have been, note the historic prices and viola, simulated historic returns.

I can't see what today's decisions regarding a portfolio would be the same (or anywhere near) as the view 2 or whatever years ago.

No problem about digging out the historic values, but so what?

Has it any value?

Meerkat wrote:I can't see what today's decisions regarding a portfolio would be the same (or anywhere near) as the view 2 or whatever years ago.

No problem about digging out the historic values, but so what?

Has it any value?

If you want to see whether the extra cost of Netwealth is justified compared to simpler, cheaper alternatives such as the Vanguard LS, the only way to do that is to compare the historical records. Not much point going back before launch date though. Their models and processes would have been tuned using historical data, so a comparison with this historical data will very likely show a bias in favour of Netwealth. If it did not, it would be unlikely that they got off the ground, except perhaps through smart marketing at retail.

Here is a review of Netwealth and comparison to other similar services.

https://moneytothemasses.com/saving-for ... t-over-50k

I suppose if you wanted to go down this route, but were cheese paring as to fees, you could invest £50k via them and then invest the balance via a low fee broker in the same investments proportionately. That would avoid paying annual percentage fees on the whole lot.

I'm not sure how these advisers decide how risky all the various investments are - a very subjective process I guess. Some things are obviously risky but it can all look very different subsequently with 20:20 hindsight. If you want equities I would have thought a global tracker like VWRL is about as low risk as you can get and you would not need an adviser presenting lots of pseudo-scientific risk ratings to you.

scrumpyjack wrote:I'm not sure how these advisers decide how risky all the various investments are - a very subjective process I guess.

In the context of advisers "risk" equates to price volatility which can be measured. It isn't the risk of asset failure, which would be mostly subjective, even if perhaps more useful.

Alaric wrote:

scrumpyjack wrote:I'm not sure how these advisers decide how risky all the various investments are - a very subjective process I guess.

In the context of advisers "risk" equates to price volatility which can be measured. It isn't the risk of asset failure, which would be mostly subjective, even if perhaps more useful.

It can only be measured retrospectively and we are always told on investment matters, the past is no guide to the future.

They guy who jumped off the Empire State Building and was still OK as he passed the 39th floor, might on that basis say it wasn't risky!

The Netwealth portfolio shown is using a lot of active asset allocation and currency judgements by using hedged equity allocations.

Vanguard life strategy are cheaper and the evidence suggests has better performance.

If you want an active element then why not go for something like Foreign and Colonial Investment trust / Bankers / Monks and throw in an element of say Personal Assets to bring the risk level down... cost would be similar and have a good track record at making the active judgements in a rational manner.

Thanks for that. Could you explain about Personal Assets? Literally personal assets?

Meerkat wrote:Thanks for that. Could you explain about Personal Assets? Literally personal assets?

What Personal Assets (PNL) is:
https://www.hl.co.uk/shares/shares-sear ... p12.50-ord

viewtopic.php?f=96&t=27375&p=378074&hilit=Personal+asset#p378074

viewtopic.php?p=380672#p380672


Quite a bit of discussion here!
viewtopic.php?p=173959#p173959

Great - many thanks.

scrumpyjack wrote:

Alaric wrote:

scrumpyjack wrote:I'm not sure how these advisers decide how risky all the various investments are - a very subjective process I guess.

In the context of advisers "risk" equates to price volatility which can be measured. It isn't the risk of asset failure, which would be mostly subjective, even if perhaps more useful.

It can only be measured retrospectively and we are always told on investment matters, the past is no guide to the future.

I remember many years ago being impressed by a financial website that had a 'risk' score next to stocks, i.e. measuring past volatility, until someone pointed out to me that a company that was slowly grinding its way into the ground would show up as 'not risky'.

torata

With respect to Risk, everyday usage is

The possibility that something unpleasant or unwelcome will happen

yet in the financial world it often means how much the price deviates from that expected, in the sense of volatility.

However the real danger is often uncertainty, what we don't know and what we don't even know to worry about...

The danger with "safe" government bonds at present is that you may have a degree of certainty, but not much security for future needs with near zero returns.

"Bad returns in bad times" (Antti Ilamen ) comes to mind when I think about risk and this link is a condensed version of what Ilamen wrote about in his excellent book. https://the7circles.uk/expected-returns-1/

My personal take is to have enough security to cover the essentials, then add diversity( knowing that in a real panic its bad for pretty much everything).
The generalist Global Investment Trusts have a good record over time, definitely not the best returns but often slightly ahead of the Global Index, additional costs often regained via competent management, a little tactical asset allocation and mild gearing.

Personal assets is a safe pair of hands, with a large chunk allocated to what they perceive to be the dominant risks, presently a good slug of Gold and TIPs with a sensible equity portfolio, could complement a diverse equity portfolio.

I agree with all that. My point really is that investment advisers gaily talk about risk and assign risk 'levels' to investments without explaining that this is all based purely on historic levels of price volatility, which may bear no relation at all to how 'risky' an investment is going forward. Then they put a footnote saying that past returns are no guide to the future.

I think it is all seriously misleading and is just a marketing tool.

scrumpyjack wrote:Then they put a footnote saying that past returns are no guide to the future.

As regards volatility that's not correct. A fund whose mandate was to invest in short term fixed interest securities is going to have low volatility for as long as it maintains that approach.

Alaric wrote:

scrumpyjack wrote:Then they put a footnote saying that past returns are no guide to the future.

As regards volatility that's not correct. A fund whose mandate was to invest in short term fixed interest securities is going to have low volatility for as long as it maintains that approach.

AIUI most of the Netwealth portfolios are equity based as are most investment advisers.