The Lemon Fool

Yes, RICA is looking distinctly wobbly (for a so-called capital preservation IT). Recovered a bit from its big fall, but by no means back to where it was. Anyone know how the NAV is performing , rather than the share price? Could be a buying opportunity if a discount develops.

6.5% over 5 years.

One year he'll be right, just like a broken clock...

Parky wrote:Yes, RICA is looking distinctly wobbly (for a so-called capital preservation IT). Recovered a bit from its big fall, but by no means back to where it was. Anyone know how the NAV is performing , rather than the share price? Could be a buying opportunity if a discount develops.

Ruffer was reportedly buying Puts and rolling them over, expecting a big drop "any day now". So in theory RICA should have prospered from this downturn. But it's gone down as well albeit not as much as some other ITs.

I wonder whether Ruffer finally lost faith with spending the fund's money on protection, just in time to be whipsawed. The saying goes that "a bear market happens when the last bear throws in the towel".

I dumped RICA in the summer because I lost faith in it. That bet worked out as I held onto the cash rather than reinvest it. The best defence against a bear market is cash, not an IT claiming to have negative beta.

RICA is gone as is RCP (though for different reasons).

Money is split between VWRL and cash.

I'm happy with PNL and CGT and I think I "get" what they're doing better than I do Ruffer.

It was only a 3.5% position anyway but I'm not losing 7% in a month from a "capital preservation" fund.

StOmer wrote:

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

For anyone interested, there is a December 2018 update to the MoneyWeek Investment Trust portfolio referred to in the above quote, along with related thinking:

https://moneyweek.com/499648/moneyweek- ... its-money/

Thanks for that richfool. Great minds think alike and I also like Merryn Somerset Webb. I think the comments make a lot of sense. Interesting that they seem to have gone off Law Debenture, partly of course because the holdings are similar to those of Temple Bar. I have never held LD but I have often thought that I should. I am interested that she still likes Murray International, another of my holdings. I should have topped Scottish Mortgage but have just left it alone, silly me!

Dod

Ruffer now down 13% from its peak last August. Terrible performance for a so-called "capital preservation" IT. Their strategy must be very wrong. I think I will sell my holding to offset capital gains elsewhere.

Parky wrote:Ruffer now down 13% from its peak last August. Terrible performance for a so-called "capital preservation" IT. Their strategy must be very wrong. I think I will sell my holding to offset capital gains elsewhere.

I held it for literally around a month during which time it lost 11%.

It was "only" a couple of grand holding but honestly if I expected to lose 11% I wouldn't have used a "capital preservation" IT as you say.

I sold and went into FGT and TIGT which are of course different animals but oddly I sleep better.

Ruffer (RICA) has steadied out since their hiccup at the end of last year, although still at a discount to NAV of around 5%. In the unaudited year-end results out today they said they almost bought shares to reduce the discount, but decided against it, which implies that they do not intend to let it drift further. However, they are sticking with their options strategy to limit falls, which apparently went wrong last year.
I purchased some more today for Mrs. P's ISA. Where else can you get Index-Linked Bonds and Gold, together nearly 50% of the RICA portfolio, for a 5% discount?

Parky wrote:Ruffer (RICA) has steadied out since their hiccup at the end of last year, although still at a discount to NAV of around 5%. In the unaudited year-end results out today they said they almost bought shares to reduce the discount, but decided against it, which implies that they do not intend to let it drift further. However, they are sticking with their options strategy to limit falls, which apparently went wrong last year.
I purchased some more today for Mrs. P's ISA. Where else can you get Index-Linked Bonds and Gold, together nearly 50% of the RICA portfolio, for a 5% discount?

This is the dilemma I have.

I went back into RICA due to the "cash pile" problem in another thread and have around 15% in it.

On a 5% discount and compared to (literally) "cash in the bank" I'm toying with whether it's worth dropping in some more.

Parky wrote:Ruffer (RICA) has steadied out since their hiccup at the end of last year, although still at a discount to NAV of around 5%. In the unaudited year-end results out today they said they almost bought shares to reduce the discount, but decided against it, which implies that they do not intend to let it drift further. However, they are sticking with their options strategy to limit falls, which apparently went wrong last year.
I purchased some more today for Mrs. P's ISA. Where else can you get Index-Linked Bonds and Gold, together nearly 50% of the RICA portfolio, for a 5% discount?

From Personal Assets, though agreed without the discount.

Upon carrying out a quick comparison of PNL, CGT and RICA, PNL seems to hold the most US TIPS and slightly more gold.

Aminatidi wrote:

Parky wrote:Ruffer (RICA) has steadied out since their hiccup at the end of last year, although still at a discount to NAV of around 5%. In the unaudited year-end results out today they said they almost bought shares to reduce the discount, but decided against it, which implies that they do not intend to let it drift further. However, they are sticking with their options strategy to limit falls, which apparently went wrong last year.
I purchased some more today for Mrs. P's ISA. Where else can you get Index-Linked Bonds and Gold, together nearly 50% of the RICA portfolio, for a 5% discount?

This is the dilemma I have.

I went back into RICA due to the "cash pile" problem in another thread and have around 15% in it.

On a 5% discount and compared to (literally) "cash in the bank" I'm toying with whether it's worth dropping in some more.

Would you not then been just as well to have stayed in Ruffer all along? I m not getting at you but if your answer is yes, then it illustrates that LTBH is probably best and just ignore market ruffles/noise especially with such conservative stuff as you are holding.

Dod

@Dod you may well be right there. I've learned some lessons the last 18 months and in my "defence" the lesson I learned there was a very cheap one compared to what it may have been if I ended up with £100K in Scottish Mortgage (random example but you get the idea) and panicked.

Aminatidi wrote:@Dod you may well be right there. I've learned some lessons the last 18 months and in my "defence" the lesson I learned there was a very cheap one compared to what it may have been if I ended up with £100K in Scottish Mortgage (random example but you get the idea) and panicked.

Aminatidi, your name seems to appear a lot in these threads .

There really is a lot to be said for deciding on asset allocation to suit your risk profile, whether that is active or passive. and just pound cost averaging into it with your income. Rebalance once every 6 months.

Personally a Vanguard Life strategy and then some satellites if you want gold/alternatives/emerging markets/smaller company tilts works for me with some stock picking on the side .

Trading in and out of These Absolute return funds I wouldn't recommend.

I read a lot (or try) and ask a lot of stuff.

I don't actually do a lot.

I suspect if you go off volume of queries it makes me look like someone maniacally shifting in and out of funds/trusts when actually nothing could be further from the truth and I'm sure as hell not trading in/out of anything

There have been a few mistakes or lessons, I would expect that happens to us all, but again, very cheap ones so far and I'd hope I've learned something from them.

Aminatidi wrote:I read a lot (or try) and ask a lot of stuff.

I don't actually do a lot.

I suspect if you go off volume of queries it makes me look like someone maniacally shifting in and out of funds/trusts when actually nothing could be further from the truth and I'm sure as hell not trading in/out of anything

There have been a few mistakes or lessons, I would expect that happens to us all, but again, very cheap ones so far and I'd hope I've learned something from them.

Yes I guess I'm still struggling with your logic of employing multiple wealth preservation/absolute return funds.


It would be more straightforward for you to decide the optimal asset allocation for your desired risk profile and then select the funds/trusts accordingly.

If you want 50 equities 40 bonds 10 Gold or whatever split/ it can be fairly simply manufactured selecting your funds of choice. Then again you can split those equity funds/bond forms however you choose fit.

As soon as you get into the absolute return fund/wealth preservation game/ you are paying managers to determine the correct asset allocation and then effectively ignoring it by having 5 or 6 different absolute return funds. I'd imagine it's challenging to understand exactly what your allocation is at any point in time and for all you know Pnl is selling gold to CGT and you are paying them both for the pleasure.

Anyway I will leave it at that, I am no expert I just find most of what you say comes across as fairly sensible, but then you have created something that looks like a PITA to manage.

The lessons I’ve learnt from losing money have been worth the money lost. I think that makes sense

Walrus101 wrote:Trading in and out of These Absolute return funds I wouldn't recommend.

Agreed but at the same time I do not believe that these are funds that you should hold for the very long term either. Because in the long run markets go up, and these vehicles under-perform on the way up. So whilst you might hold, say, an index fund for as long as you don't need the money, the aim of PNL etc. is at some point to sell it.

So if you own these funds I think you need an idea of the circumstance in which you will sell it. And that is presumably when a bear market is going on, and these funds have done what they are supposed to do, i.e. hold their value, or at least go down a lot less than the market.

And then the idea is to sell them and reinvest in funds with a higher beta, in order to catch the next wave up. Of course timing that is tricky. The bottom is only evident when it is too late. But you could set yourself a target of, say, when the market is down 25%, 40% or whatever makes sense for you. Or sell it in blobs as the decline continues.

In my case I had a six-figure position in PNL when the 2008 market crash happened. PNL was down but the market was down a lot more. So I sold the whole lot and redeployed it in more mainstream equity vehicles.

So not exactly trading. But not buy, hold and forget either.

Lootman wrote:

Walrus101 wrote:Trading in and out of These Absolute return funds I wouldn't recommend.

.....

So not exactly trading. But not buy, hold and forget either.

Go back and read what you wrote. You've just invented trying to time the market. There is quite a lot of research on that, and not a lot of it supports your view.

genou wrote:

Lootman wrote:

Walrus101 wrote:Trading in and out of These Absolute return funds I wouldn't recommend.

So not exactly trading. But not buy, hold and forget either.

Go back and read what you wrote. You've just invented trying to time the market. There is quite a lot of research on that, and not a lot of it supports your view.

I know what I wrote. When you hold a position you should normally have an exit strategy, i.e the terms under which you will close out the position. That is hardly controversial. I'm just saying that I'd apply it to these so-called wealth preservers as well, at least unless you are content with lower, less volatile returns forever.

Of course, those vehicles themselves are trying to time the market, and I am aware that is hard for them, you and me. But I have no regrets about selling PNL when I did. The outcome was superior to staying in it over the last decade, although had markets gone all the way down to zero then I might have regretted it.

I did establish a smaller positon in PNL some years later, as again the markets were becoming sprightly.