The Lemon Fool

Is there a cheap ETF equivalent of Capital Gearing / Personal Assets Trust. I have some money to invest but don't like current share price evaluations - and looking for a better alternative to cash to sit it out over the summer. I like PNL and CGT - but rather put off by the stamp duty on a short term basis. Can anyone make any suggestions - to be clear I'm not looking for a riskless investment. Looking for something mainstream rather than niche.

appleyard wrote:Is there a cheap ETF equivalent of Capital Gearing / Personal Assets Trust. I have some money to invest but don't like current share price evaluations - and looking for a better alternative to cash to sit it out over the summer. I like PNL and CGT - but rather put off by the stamp duty on a short term basis. Can anyone make any suggestions - to be clear I'm not looking for a riskless investment. Looking for something mainstream rather than niche.

No, in the sense that PNL and CGT are actively managed with regard to asset allocation, mixing up equities, bonds, currencies, gold, derivatives etc. You are paying for what you hope is the managers' better instincts around asset allocation and market timing.

Not that an ETF cannot be active. The "index" that it follows can be any customised and changing basket of underlying securities. But I do not know of any ETFs that work that way.

What you could do is select a small basket of ETFs, one for equities, one for bonds, one for gold etc. And then move around between them in the same way as PNL/CGT do.

But I would question if it is worth all that hassle just to save a one-time one half of one percent in stamp duty. You can also probably find an OEIC asset allocation fund if stamp duty bothers you that much.

appleyard wrote:Is there a cheap ETF equivalent of Capital Gearing / Personal Assets Trust. I have some money to invest but don't like current share price evaluations - and looking for a better alternative to cash to sit it out over the summer. I like PNL and CGT - but rather put off by the stamp duty on a short term basis. Can anyone make any suggestions - to be clear I'm not looking for a riskless investment. Looking for something mainstream rather than niche.

as mentioned already an open ended fund would also avoid stamp duty. this one seems to have similar characteristics and is managed by the same fella...

https://www.hl.co.uk/funds/fund-discoun ... cumulation

EDIT!!!... but buying on a different platform may be an issue as it says here that HL gets the 5% initial charge waived.

They are OEICs, but you could consider one of the more conservatively positioned Blackrock MyMap funds perhaps. They are low cost but have some discretionary management applied in order to tilt the portfolio towards or away from risk as required. I have a fair slug of MyMap6 which is closest to being 100% equity, but they do manage exposure dynamically within certain boundaries depending upon whether they are risk "on" or risk "off". Holding this in Halifax or XO or similar helps keep OEIC holding charges down.

Troy Trojan and CG Absolute Return are the OEIC equivalents.

No stamp duty and depending on your platform probably no dealing fees but possibly platform fees and witholding tax to think about as CGAR is classed as offshore.

Lootman wrote:

appleyard wrote:Is there a cheap ETF equivalent of Capital Gearing / Personal Assets Trust. I have some money to invest but don't like current share price evaluations - and looking for a better alternative to cash to sit it out over the summer. I like PNL and CGT - but rather put off by the stamp duty on a short term basis. Can anyone make any suggestions - to be clear I'm not looking for a riskless investment. Looking for something mainstream rather than niche.

No, in the sense that PNL and CGT are actively managed with regard to asset allocation, mixing up equities, bonds, currencies, gold, derivatives etc. You are paying for what you hope is the managers' better instincts around asset allocation and market timing.

Not that an ETF cannot be active. The "index" that it follows can be any customised and changing basket of underlying securities. But I do not know of any ETFs that work that way.

What you could do is select a small basket of ETFs, one for equities, one for bonds, one for gold etc. And then move around between them in the same way as PNL/CGT do.

But I would question if it is worth all that hassle just to save a one-time one half of one percent in stamp duty. You can also probably find an OEIC asset allocation fund if stamp duty bothers you that much.

ETFs absolutely can be active. In the US there are billions in actively managed ETFs. For the ETF mechanism to work you don’t need an index at all, just a constantly updated portfolio breakdown (which obviously you get automatically with an index).

Google Ark Invest for one that’s been in the news recently.

To your point, PNL can probably be replicated with about 4 ETPs (TIPS, Index-linked Gilts, Gold, Quality global equities).

Spet0789 wrote:To your point, PNL can probably be replicated with about 4 ETPs (TIPS, Index-linked Gilts, Gold, Quality global equities).

PNL nav based total return 1992 to 2019 inclusive compared against a third each US S&P500 after 15% dividend withholding tax, 10 year gilt ladder, gold



saw similar overall annualised gain, with lower risk (lower worst year loss). Swap out S&P500 for Berkshire Hathaway that pays no dividends and you had higher reward with less risk.

Looking back further, to from 1972 using US data