What to progress too after passive trackers?

[Cookie]

I have invested what I feel is my comfortable limit in passive trackers and was wondering if their are any recommendations on a type of product to progress too after trackers?

I realize this is subjective, but I imagine others might have reached a similar internal limit at some point and would be interested in what they looked at next

Yes, everyone's circumstances are likely different, but I am just looking for ideas to research and make up my own mind

I would prefer capital growth to income and looking at long term potential

[tjh290633]

If you wish to graduate to other forms of investing, then you can look at Investment Trusts or individual equity shares.

ITs are effectively passive investing, but they are actively managed. With equities you decide on your strategy and manage your portfolio yourself.

You can look at Buy-to-Let, Commodities, Gilts and fixed interest stocks, it depends on what takes your fancy.

TJH

[JohnB]

progress or regress? What is it about trackers you feel uncomfortable with? Do you want diversity, excitement or stellar returns?

[Cookie]

progress or regress? What is it about trackers you feel uncomfortable with? Do you want diversity, excitement or stellar returns?

I feel I have reached a comfortable limit with trackers and I feel I would like more diversity

This maybe a feeling better suited to managed funds where you might invest in a just say 3-10 funds. I do wrestle with this feeling, knowing that trackers are often diversified over 500+ shares

The returns are not so important as capital preservation - I am moving from a high ish yield environment (P2P) due to loss of capital starting to bite

[JNC3]

The returns are not so important as capital preservation - I am moving from a high ish yield environment (P2P) due to loss of capital starting to bite

Have you lost Capital from P2P lending - I was considering Peer to Peer lending investment as a safer diversifier to holding equities ?

[Cookie]

The returns are not so important as capital preservation - I am moving from a high ish yield environment (P2P) due to loss of capital starting to bite

Have you lost Capital from P2P lending - I was considering Peer to Peer lending investment as a safer diversifier to holding equities ?

Yes, some as low as a third of capital returned

It does depend on what equities you are comparing to what P2P

I mainly used asset backed P2P at rates 10%+. You have to expect some defaults, but personally I feel the loans and platforms after the last 2 years of low ish defaults have started to mature. It's now when the defaults are starting to tell and starting to really bite

Funding secure, Lendy, Money thing are all seeing increasingly worrying levels of defaults and Collateral has even gone into administration

I'm on my way out and haven't invested in a new loan this year, compared to an amount in most loans the previous couple of years

[GeoffF100]

Global equity trackers spread your risk over thousands of shares. The Vanguard Global Bond fund spreads your risk over nearly 10,000 bonds. If you want to reduce your risk, hold more bonds and less equities. Also consider index linked gilts, and bank deposits / Cash ISAs guaranteed by the FSCS.

Active funds are more expensive than trackers, and those costs compound up. They are also less well diversified that broad market trackers, which increases risk. There is no way of predicting which active funds will do well. If you buy several active funds you are likely to get average performance before costs, and poor performance after costs.

P2P is risky.

[bluedonkey]

A commercial loan broker told me couldn't believe how easy it was for his bad risk borrowers to get P2P finance. Says it all really.

[Dod101]

I feel I have reached a comfortable limit with trackers and I feel I would like more diversity

This quote should win a prize for irony. How much more diversified do you want than a tracker or trackers?

Dod

[argoal]

What to progress too after passive trackers?

The framing of the question is interesting and I think betrays a misconception about investing success and how to achieve it.

I can almost hear you thinking 'Index investing is too simple. I need a more complex strategy to improve my returns'.

Many, if not most of us on here, who have been investing for a long time have tried methods of investing other than trackers only to realise that moving away from a diversified mix of global shares and bonds as GoeffF100 suggested adds additional cost and risk while usually subtracting from overall performance.

That is not to say that there are not examples of individual investing successes using other strategies, but those successes are likely to be down to either luck (which is hard to distinguish from true skill) or an unreasonably large amount of hard work, patience, experience and time spent sifting through hundreds of individual situations looking for rare opportunities.

If you are after long term capital growth then a broad spread of global equities via a low cost global tracker is more likely to provide that than any other asset class available.

OK - Given all of the above, one thing that you might want to look into is factor investing. There is no free lunch available but if you are willing to take on a little additional risk then investing in one or more factors (value, momentum, size, volatility, liquidity) has historically provided a better return than the market as a whole.

I will though immediately highlight two potential problems with using factor investing as an approach.

1. Factor investing is now widely known about and cheap to implement (via Vanguard ETFs for instance). It may not therefore provide a method of out performance in future as more people use it.

2. The research around the out performace of factor investing used a long/short strategy (i.e. long factor/short overall market) to gain its edge. This is not how factor based funds operate so they cannot reasonably be relied on provide the theoretical factor performance premium, if they provide any premium at all.

Good luck whatever you decide.

[colin]

The returns are not so important as capital preservation

You sound like you need to diversify into different asset classes, assuming the index trackers you hold now are globally diversified equity holdings why not add a short term bond fund ?

[Cookie]

How much do people diversify the platforms and trackers used?

[monabri]

I think you need to "show your hand" a bit more ! It's hard to judge "diversification" based on the info provided. I assume the trackers are "World" or
a mix of countries and not all UK based?

Holding trackers alone is not diversified so you do pose a good question.

Might I recommend the short Boglehead videos (approx 25 mins total - maybe less)..

https://www.bogleheads.org/wiki/Video:B ... philosophy

[formoverfunction]

I hold a range of 10 ETF's.

I cost average on IUSA & ISF when they look cheap and buy anything else when it's covering a distressed sector (and usually when there's reasonable income).

So at the moment IAPD and ITKY interest me.

I know some "park" cash in IUKD between trades.

I don't think you need to progress out of passive trackers. I cant see a neart time point when they won't be part of a broad portfolio strategy. They have their place alongside direct holding and funds.

They can also be a useful tool for short term trades.

May be if they are your first investments a good global IT might be the next step.

Amongts my best investments over the last decade? IUSA and IWRD that I bought in '08/09. I want be progressing out of those anytime soon I hope.

[BrummieDave]

I'd suggest F&C Investment Trust (FRCL) is a good place to start.

Global spread, relatively low cost for an active investment, and excellent long term track record.

DYOR.