The Lemon Fool

Money Week are suggesting PLA over Scottish Mortgage this week and they have had Scottish Mortgage in their portfolio for ever. Value over yield is their strategy for the comming armageddon.

john

RececaDron wrote:...suggesting a reduction in equities from 80% to 50% at that time. I don't recall the equity allocation ever rising back up from this (but could be mistaken), and only recall seeing it around or lower than 50% since.

That is correct. I haven't looked tge exact figures up but if I recall correctly, PNL had around 187m in assets prior to the GFC, dropped to just below 170m and then grew significantly following it. Assets now exceed 890m so business for them has been good despite such a low equity holding.

Where I'm leaning at the moment is towards using a chunk of PNL as a bond/cash/defence holding and combining with something like FRCL and FCS for global equity exposure.

Seems very simple and over time seems to have proven reasonably reliable.

If I were to use that as the foundation of my ongoing ISA I could/would use a GIA for some of the surplus cash as a bit of a play/feeder pot where maybe I chase more return at greater risk but look to use any profits to help feed the ISA.

Not sure if that sounds sane/sensible but it feels like it makes sense.

Key thing I think is to remember that Personal Assets is not a growth holding, their primary aim is the preservation of capital.

johnstevens77 wrote:Money Week are suggesting PLA over Scottish Mortgage this week and they have had Scottish Mortgage in their portfolio for ever. Value over yield is their strategy for the comming armageddon.

john

PLA? Surely PNL?

johnstevens77 wrote:Money Week are suggesting PLA over Scottish Mortgage this week and they have had Scottish Mortgage in their portfolio for ever. Value over yield is their strategy for the comming armageddon.

I do not what PLA is but Scottish Mortgage is certainly not a yield investment trust. Is there are a coming Armageddon? If so better think about other stuff as well.

Dod

I don't know what the OP meant with PLA but PNL has been in the Money Week portfolio for many years, probably since inception knowing how often they have rec'd it. The IT portfolio at MW has not been updated on the website since 12/2017 and then held CLDN, PNL, SMT, RCP, LWDB and TMPL. I think Merryn wrote about Scottish or another Edinburgh based trust awhile back and declared an interest as her partner (I think) works there, perhaps that has replaced SMT? We don't see Money Week in the local newsagents so I rarely buy it these days unless visiting a larger town.

StOmer wrote: The IT portfolio at MW has not been updated on the website since 12/2017 and then held CLDN, PNL, SMT, RCP, LWDB and TMPL.

That collection of ITs seems to me to be good for all seasons and I certainly would do nothing with them now or in any other foreseeable circumstance. Mind you I hold four of them and am missing only PNL and LWDB, both of which are good I think in their own ways. Thanks for listing the collection.

Dod

toofast2live wrote:

johnstevens77 wrote:Money Week are suggesting PLA over Scottish Mortgage this week and they have had Scottish Mortgage in their portfolio for ever. Value over yield is their strategy for the comming armageddon.

john

PLA? Surely PNL?

Serves me right, I ought to have written the name, Personal Assets.

john

johnstevens77 wrote:Serves me right, I ought to have written the name, Personal Assets.
john

It certainly helps readers if the name accompanies the code on its first mention in a message.

Dod101 wrote:That collection of ITs seems to me to be good for all seasons and I certainly would do nothing with them now or in any other foreseeable circumstance. Mind you I hold four of them and am missing only PNL and LWDB, both of which are good I think in their own ways. Thanks for listing the collection.
Dod

Thanks, the relevant portfolio can be seen at https://moneyweek.com/funds/the-moneyweek-portfolio-of-investment-trusts/
HTH,
Mickey

Clearly great minds think alike. Scottish Mortgage and Caledonia are well ahead of the pack followed by RIT. Glad I hold all three. I am missing Law Debenture but hold Temple Bar, and gave up on Personal Assets some time ago.

None of this is answering the OP's original point of course, so maybe he is the one on the wrong tack.

Dod

Dod101 wrote:Clearly great minds think alike. Scottish Mortgage and Caledonia are well ahead of the pack followed by RIT. Glad I hold all three. I am missing Law Debenture but hold Temple Bar, and gave up on Personal Assets some time ago.

None of this is answering the OP's original point of course, so maybe he is the one on the wrong tack.

Dod

If I use any of them it would likely be a straight 50/50 with it being 50% and the other 50% being one of:

Lindsell Train Global Equity (50% of the 50%)
Fundsmith (50% of the 50%)

or

F&C Investment Trust (70% of the 50%)
F&C Global Smaller Companies (30% of the 50%)

Backtesting can only get you so far but a morning star X-Ray puts that at around 70% equities with the rest being some bond/cash/commodity exposure.

I guess there's always an argument that it's just an expensive multi-asset.

Aminatidi wrote:I guess there's always an argument that it's just an expensive multi-asset.

Concentrate on performance rather than costs and imho you will be fine. I track my performance against a Vanguard Life Strategy 80% and have done better than that every year since it started out. Over time the difference gets quite substantial. We will use Vanguard as and when I am no longer willing or able to do any better.
ps. I find VLS does better whenever I sell and hold cash for awhile, I am usually too late or too early buying back in.

StOmer wrote:

Aminatidi wrote:I guess there's always an argument that it's just an expensive multi-asset.

Concentrate on performance rather than costs and imho you will be fine. I track my performance against a Vanguard Life Strategy 80% and have done better than that every year since it started out. Over time the difference gets quite substantial. We will use Vanguard as and when I am no longer willing or able to do any better.
ps. I find VLS does better whenever I sell and hold cash for awhile, I am usually too late or too early buying back in.

That's what I've tried to do.

I am interested what people consider a decent return.

For example with the backtesting on the above (what else can you go off?) the average returns since inception are 8.8 for PNL/F&C option and 13% for the PNL/LT/FS option, which of course doesn't have the history to have gone through a mix of market conditions.

Honestly if I could average 8.8% over the long term that seems amazing v what I read the average investor returns.

Aminatidi wrote:

StOmer wrote:

Aminatidi wrote:I guess there's always an argument that it's just an expensive multi-asset.

Concentrate on performance rather than costs and imho you will be fine. I track my performance against a Vanguard Life Strategy 80% and have done better than that every year since it started out. Over time the difference gets quite substantial. We will use Vanguard as and when I am no longer willing or able to do any better.
ps. I find VLS does better whenever I sell and hold cash for awhile, I am usually too late or too early buying back in.

That's what I've tried to do.

I am interested what people consider a decent return.

For example with the backtesting on the above (what else can you go off?) the average returns since inception are 8.8 for PNL/F&C option and 13% for the PNL/LT/FS option, which of course doesn't have the history to have gone through a mix of market conditions.

Honestly if I could average 8.8% over the long term that seems amazing v what I read the average investor returns.

Over the last couple of years I’ve worked quite a lot on future returns forecasts, or at least overseen a project on it for an investment management company, working with one of the main players in economic modelling, US academics and our in house investment managers, and i’d be happy with 5% p/a average going forward (without allowing for inflation).

My portfolio (other then cash which is getting eaten up by a business venture), is 95% equities (more than 50% of that private equity, small cap and em) and 5% REITs

People returns expectations seem to be way above that. I hope I’m wrong. Time will tell

Muddywaters wrote:

Aminatidi wrote:

StOmer wrote:Concentrate on performance rather than costs and imho you will be fine. I track my performance against a Vanguard Life Strategy 80% and have done better than that every year since it started out. Over time the difference gets quite substantial. We will use Vanguard as and when I am no longer willing or able to do any better.
ps. I find VLS does better whenever I sell and hold cash for awhile, I am usually too late or too early buying back in.

That's what I've tried to do.

I am interested what people consider a decent return.

For example with the backtesting on the above (what else can you go off?) the average returns since inception are 8.8 for PNL/F&C option and 13% for the PNL/LT/FS option, which of course doesn't have the history to have gone through a mix of market conditions.

Honestly if I could average 8.8% over the long term that seems amazing v what I read the average investor returns.

Over the last couple of years I’ve worked quite a lot on future returns forecasts, or at least overseen a project on it for an investment management company, working with one of the main players in economic modelling, US academics and our in house investment managers, and i’d be happy with 5% p/a average going forward (without allowing for inflation).

My portfolio (other then cash which is getting eaten up by a business venture), is 95% equities (more than 50% of that private equity, small cap and em) and 5% REITs

People returns expectations seem to be way above that. I hope I’m wrong. Time will tell

5% with 95% equities?

That feels on the low side?

Please don't misunderstand me I'm not expecting double digits but I'd thought/hoped/assumed that long term people would be realising around 7% - 8% with a balanced portfolio?

Aminatidi wrote:

Muddywaters wrote:

Aminatidi wrote:
That's what I've tried to do.

I am interested what people consider a decent return.

For example with the backtesting on the above (what else can you go off?) the average returns since inception are 8.8 for PNL/F&C option and 13% for the PNL/LT/FS option, which of course doesn't have the history to have gone through a mix of market conditions.

Honestly if I could average 8.8% over the long term that seems amazing v what I read the average investor returns.

Over the last couple of years I’ve worked quite a lot on future returns forecasts, or at least overseen a project on it for an investment management company, working with one of the main players in economic modelling, US academics and our in house investment managers, and i’d be happy with 5% p/a average going forward (without allowing for inflation).

My portfolio (other then cash which is getting eaten up by a business venture), is 95% equities (more than 50% of that private equity, small cap and em) and 5% REITs

People returns expectations seem to be way above that. I hope I’m wrong. Time will tell

5% with 95% equities?

That feels on the low side?

Please don't misunderstand me I'm not expecting double digits but I'd thought/hoped/assumed that long term people would be realising around 7% - 8% with a balanced portfolio?

That’s a little on the high side, maybe we could meet in the middle?

All joking aside I would say you’ve got no chance of achieving that with a balanced portfolio. I’m sure people have done over the last 10 years but I wouldn’t bank on that going forward

Muddywaters wrote:Over the last couple of years I’ve worked quite a lot on future returns forecasts, or at least overseen a project on it for an investment management company, working with one of the main players in economic modelling, US academics and our in house investment managers, and i’d be happy with 5% p/a average going forward (without allowing for inflation).

I'm not surprised at the number, which might even look quite generous. Could you clarify a few things:

- whether the 5% finger-in-the-air (assumption) is a nominal or real return figure (not clear from your bracketed comment);

- the time horizon that returns forecast applied to;

- which equity market (global or US) your forecasts were predicated on?

Muddywaters
All joking aside I would say you’ve got no chance of achieving that(7-8%) with a balanced portfolio. I’m sure people have done over the last 10 years but I wouldn’t bank on that going forw

What makes you believe that?