Personal Assets

[billG]

One thing this discussion has not covered is that it is fairly easy to replicate some of the features of PNL. Buy via ETF gold, linkers, short term bonds and quality equities and you will end up with something similar ......at half the price....

[Aminatidi]

One thing this discussion has not covered is that it is fairly easy to replicate some of the features of PNL. Buy via ETF gold, linkers, short term bonds and quality equities and you will end up with something similar ......at half the price....

Do you have the ability to act as quickly if you feel something needs adjusting?

I was literally reading their latest report where someone asked this same question - it's quite a good read on their fees

[OhNoNotimAgain]

Time will tell.

And time only benefits those assets that generate an income that can be reinvested.

Capital assets that just sit there and cost money are no good to anyone.

[Lootman]

One thing this discussion has not covered is that it is fairly easy to replicate some of the features of PNL. Buy via ETF gold, linkers, short term bonds and quality equities and you will end up with something similar ......at half the price....

What would be harder to duplicate is PNL's ability to change those allocations in a timely manner, and without incurring a CGT liability.

You also probably could not duplicate PNL's use of futures to quickly add or subtract equity exposure,

Now, you may not rate PNL's ability to add value by such methods. But that's a separate issue from a claim that you can duplicate its performance merely by duplicating a snapshot of its holdings.

[Aminatidi]

Surely you could say the same about most funds?

Just buy some Unilever, just buy some Diageo and so on.

[billG]

When there is a big equity market correction investors want to flee to something safe. G10 government bonds are about as safe as it gets. (Some also like Gold) In such times Central Banks/ Governments have lowered interest rates making such bonds even more attractive so prices go up. As equity prices recover interest rates will be increased to curb inflation and the whole cycle repeats.
The wealth perseveres in general have a big slug of safe government bonds and gold and ‘quality’ stocks and this will lag in the performance tables during a bull market and at the point of crisis the government bonds and gold minimise any downside (if any) and they sell some of this stuff and buy equities and ride the rising market for a while until they revert to type and buy a big slug of bonds/gold and predict gloom until it happens again.
Sure I am over simplying but I strongly suspect this is where the majority of the returns come from and if I am correct you can replicate this strategy yourself. If however you believe fleet of foot actions, buying some options and identifying ‘quality’ equities are key to the performance and the manager has the skills to identify the pinch points and act accordingly then they are worth there big fat fee.
Having said all that I am also of the opinion that if you believe in wealth preservers then you need to have the majority of you portfolio invested in a spread of them say RCP, CGT, PNL and RICA would do nicely. I heard Peter Spiller talk last year and he said the CGT was designed for a client to have 100% of their wealth invested in them.
One further thought if you had invested in a spreads of global growth funds just before the 2008 crash you would be looking at gains of ~190% (Witan 200%; F&C 180%; Alliance 190%) as opposed to ~80% from PNL you can still “afford” to lose 50% of your portfolio value and not be any worse off that if you had stuck with PNL.
Then again you could have a growth portfolio and over time buy more linkers, short term government bonds, hold lots of cash & gold and reduce you holding in highly geared stocks ……. That said I will give the options a miss.
Probably comes down to your personality, discipline, time and interest as to what is the best approach.
Good Luck,
Bill
PS. Lootman’s point about CGT is valid. That said some will a substantial amount of their wealth in tax free wrappers (ISA, SIPP etc.) which they manage.

[richfool]

I've been having a rethink about PNL and protection trusts.

I've noticed that when markets have fallen back, PNL has also fallen back; maybe less than the market, but it certainly wasn't "immune" from the falls. To me that isn't providing the protection that I am in effect paying for, (and paying for partially by foregoing performance in times when markets are rising).

My second point is that I don't like the fact that PNL holds c 9.5% tobacco stocks. I see neither growth nor protection there, only a dividend yield.

Also noting the point made earlier that there is little value in holding small proportions or positions in wealth protectors like PNL, overall I am coming to the conclusion that instead it may be preferable to simply hold some cash pending deployment when opportunities arise from future market falls.