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Managed funds


Hopeful
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Quick question, or more thinking aloud.

Need to look after my late Father's investments for my Mother. I know fekk all about shares and investing :-)

Father had a portfolio that could buy a decent house. Did it himself but has been largely unattended for about 6 years, or more, I guess. It was all a closely guarded secret. His plan was to write a cheque to himself and have it put in his coffin xD

It's very unbalanced, 75% is due to growth in 10% of the companies, which seem to have been genius picks at the time, but which now looks a bit risky. Dividend yield OK-ish but underperforming compared to the size of the investment.

Most concerned about maintaining value compared to inflation and giving Mother an income - she has no decent state pension even.

Thinking of putting the whole lot into a managed fund. Fees about 0.85%. Industry standard, but I really don't like giving money away and it makes me think I should DIY..

But a managed fund in my situation is probably better approach than losing all the value by my making mistakes, right ?

 

 

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Yes.

Although I would go with trackers - even lower fees - rather than a managed funds as there is plenty of research showing that the good years for fund managers are offset by the bad and in the long term they will usually come at or only marginally different to the return on the index.  When you take off their higher fees it usually means that they do worse.

The other product of long term research is that funds in developing / emerging economies do worse over time than the steadily profitable retruns form developed economies because of their regular huge crashes.  If you're brave enough to get in and get out at the right time you cna do very well but for buy and hold it's developed economies every time.

Of course DYOR.

Here is Warren Buffet's famous advice to his wife were he to die.  Of course that is advice to somebody in the US hence the specific S&P 500 index because it is a big economy and by investing in that she avoids currency fluctuations.

Quote

What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit…My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors…

https://www.forbes.com/sites/davidwismer/2014/03/02/warren-buffett-investing-advice-for-you-and-my-wife-and-other-quotes-of-the-week/

I have set up both my and my parents' investments along these lines as none of us wish to do active share dealing these days (though I might return to it if I get bored).

Though bugger 10% of cash in governmnet bonds; I think that advice was given in a different interest rate environment.

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Democorruptcy
3 hours ago, Hopeful said:

Quick question, or more thinking aloud.

Need to look after my late Father's investments for my Mother. I know fekk all about shares and investing :-)

Father had a portfolio that could buy a decent house. Did it himself but has been largely unattended for about 6 years, or more, I guess. It was all a closely guarded secret. His plan was to write a cheque to himself and have it put in his coffin xD

It's very unbalanced, 75% is due to growth in 10% of the companies, which seem to have been genius picks at the time, but which now looks a bit risky. Dividend yield OK-ish but underperforming compared to the size of the investment.

Most concerned about maintaining value compared to inflation and giving Mother an income - she has no decent state pension even.

Thinking of putting the whole lot into a managed fund. Fees about 0.85%. Industry standard, but I really don't like giving money away and it makes me think I should DIY..

But a managed fund in my situation is probably better approach than losing all the value by my making mistakes, right ?

 

 

No.

I definitely wouldn't put ALL my eggs into one basket.

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