Holly's Blog: The Boring Money Fund - how have we done?
9 April, 2021
Some readers will remember that we asked you guys to help us create the Boring Money fund back in December.
We asked you to tell us which regions, sectors and even which thematic industries you thought would do best in 2021 – and what proportion you would allocate to each - and then we put our money where your collective mouth was.
Some readers will remember that we asked you guys to help us create the Boring Money fund back in December.
We asked you to tell us which regions, sectors and even which thematic industries you thought would do best in 2021 – and what proportion you would allocate to each - and then we put our money where your collective mouth was. And invested £2,000 on the first trading day of 2021, creating the Boring Money fund on platform AJ Bell. (https://www.boringmoney.co.uk/isas-pensions/aj-bell-youinvest/)
In a nutshell our fund is:
All invested in passive funds or ‘ETFs’ (exchange traded funds) (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/etfs/) – typically the cheapest way to access a region or sector
Nearly 40% of the fund is in sustainable versions of global indices per your preference
Your thematic picks were clean energy, healthcare and biotech – at the time of investment 20% of the portfolio was allocated here – yikes!
Our main bet was the US market – you wanted 20% in the S&P 500
My friends, this is not a fund for the faint-hearted and its performance (https://www.boringmoney.co.uk/learn/articles/the-boring-money-fund-how-have-we-done/) best described as a grasshopper on speed! Check out the asset allocation below.
Eagle-eyed readers will note that our asset allocation on 1st April showed an eye-watering 19% position in China. The worst-performing sector of March 2021. Well done us!
The (short-term) best…
The top-performing three funds over the last three months have been:
HSBC American Index fund – up 5.9%
Invesco S&P 500 ESG ETF – up 5.6%
L&G Future World ESG UK Index fund – up 5.3%
(ESG stands for Environmental Social and Governance – less toxic versions of any index).
And the (short-term) worst...
The three main detractors from performance have been all those trendy thematic plays:
iShares Nasdaq US Biotech ETF – down 5.8%
iShares Healthcare Innovation ETF – down 6.3%
iShares Global Clean Energy ETF – down 16%!
The scores on the doors…and why
And after all is said and done, after three months our £2,000 turned into….£2,001.45!
It pains me to report that our ‘competitor’ the Vanguard LifeStrategy 100% equity fund returned 4.73% for the quarter 😊. We are playing catch-up people!
If we look at our fund we can see that our overall US allocation is pretty ‘normal’. However our allocation to China is sky-high. And we’re a bit light when it comes to the UK. We also have hefty thematic bets on clean energy and healthcare. Gulp.
This year will either end with us as the best performing manager in the UK. Or the worst. And you know the drill. If we’re the worst it’s all your fault. And if it’s the best, I’m a genius.
On a brighter note
On a final more positive note, a Morningstar X-Ray service on the AJ Bell platform has kindly back tested our portfolio over a 10-year period. Although it has been a wild ride, I am pleased to report that our fund – had we bought it 10 years ago – would have outperformed the Global Large-Cap Blend Equity Index.
LOL Let’s wait and see what Q2 brings.
More prudent alternatives
Next week we’ll be bringing you a review of all robo adviser performance over 2020 and Q1 2021. Which ones have done the best over the shorter-term and the longer-term?
Here’s a clue. The best performing ‘high risk’ robo adviser portfolio after all charges in 2020 was a sustainable variant of a portfolio and returned over 13% after all charges. 2020 was a good year for those who excluded oil and underweighted stocks such as airlines.
It was all change in Q1 however as the gas-guzzling FTSE100 roared back into play, returning about 4% over the quarter as the economy spluttered back into action. In this much shorter timeframe (3 months) the best performing robo adviser returned 4.2% after all charges. We’ll reveal all next week.
On a final note, we’re interested in your take on sustainable investing over the course of 2021. Is this becoming mainstream and fundamental? Or is it niche and not on your radar? So we’ll end with a quick poll.
Over the course of 2021 which of these best describes your intentions:
a) Make every investment I own a sustainable fund or portfolio (https://emailboringmoney.co.uk/t/4QZH-HIYO-DEQJU-ECOTP-1/c.aspx)
b) Move some existing investments into sustainable versions (https://emailboringmoney.co.uk/t/4QZH-HIYO-DEQJU-ECOTQ-1/c.aspx)
c) Invest new money into sustainable investments (https://emailboringmoney.co.uk/t/4QZH-HIYO-DEQJU-ECOTR-1/c.aspx)
d) Nothing so pronounced – maybe some incremental changes here and there (https://emailboringmoney.co.uk/t/4QZH-HIYO-DEQJU-ECOTS-1/c.aspx)
e) Make no change – sustainable investments aren’t my thing (https://emailboringmoney.co.uk/t/4QZH-HIYO-DEQJU-ECOTT-1/c.aspx)
Have a great week everyone
Holly
