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Post by Fletchsmile on Sept 6, 2019 12:57:53 GMT 7
Any suggestions on bond funds bought via UK?
I'm looking for a decent return, for spare cash in my SIPP, for the next 4 years or so, until I can start withdrawing from it, inlcuding part of the 25% tax free lump sum.
Cash earns next to nothing.
I've enough equities, plus we're probably late cycle now, so a reasonable chance of an equity market crash in the next 4 years, so I don't want to be sat long term waiting for an equity market recovery, which I would do normally. There's a good chance I want the money in about 4 years or so.
The 2 main funds I hold already via the UK, which I've held for some time are:
1) Royal London Sterling Extra Yield - Class Y
2) Sanlam Strategic Bond - Class P
These are 1st and 2nd out of 85 funds in the IA Sterling Strategic Bond Sector. Ball park return has been 40%-ish in the last 5 years, and returns have been positive in each of the last 5 year rolling periods.
So both currently fit the bill nicely, and have done pretty much what I wanted - lowish risk, with a reasonable annual return, positive returns (or low losses) in years where equities have a hard time, eg 2018
{I hold the Class Y version thru Hargreaves Lansdown, so my return at 41.4% over 5 years is better than the 38.5% listed by Trustnet for the Class A, likely given the lower charges}
The reason I'm looking for a new fund is:
1) Royal London - I already have a sizeable allocation to it, so looking for something else
2) Sanlam would have been the natural choice. But they are going thru a process of merging the Sanlam version with Man GLG Version. Man GLG's version had a poor record in this space compared to Sanlam. Though when they bought out the fund fund Sanlam they took 2 of the fund managers who now run Man GLG. I've been happy with Sanlam for years, but want to see how these changes and reorganisations pan out, before adding to it.
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 6, 2019 14:09:51 GMT 7
I looked into Baillie Gifford Strategic Bond B and GAM Star Credit since I'm also faced with a sizable holding (percentage wise) in Sanlam and am unsure what the takeover by Mann will bring.
I'm unsure about GAM following the recent scandal and losses so I kinda set them aside for now. BG on the other hand I like, fund size is 1.1 bill. and the lead FM is alpha rated, their five year returns are OK but the yield is only 3.76%. I'll be keen to see what others have in mind here.
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Post by Fletchsmile on Sept 6, 2019 15:24:45 GMT 7
For Sanlam Strategic Bond/ Man GLG. I'm not so worried about exisiting funds.
Man GLG actually acquired Sanlam Strategic Bond fund just under a year ago if I recall. The 2 fund managers wanted to move on to ManGLG, which would have raised isssues with continuity for the Sanlam fund. So Sanlam decided to sell the fund on with them as well. As a result the 2 fund managers are the same as before. I believe the 2 new fund managers also took over the ManGLG strategic fund which was previously poor in my view.
They seem to have done an OK job, with Sanlam Strategic continuing OK, and the ManGLG version picking up, so it has been 1st quartile over 3m and 6m - a short time frame, but shows an improvement.
The next step is to merge the 2 funds, as it doesn't make commercial sense to run two similar style funds. Given Sanlam Strategic has continued OK, and Man GLG Strategic has picked up, it doesn't look like there would be major issues. Just the fund managers are still new to ManGLG, and I'm not sure what impact (if any) working under the ManGLG group rather than Sanlam - a smaller boutique group - might have going forward
HL alerted me to the merger, last trading days pre merger etc, but not a lot of further details. It has never been one of HL's main focus funds
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 6, 2019 15:35:53 GMT 7
Yes, I received the same information from HL, very helpful to understand. I'm pleased with the way the Sanlam fund has performed and I don't expect to change it, but I shall watch it more closely perhaps in light of recent news. But I am also interested in taking some of the risk out of my holdings hence my earlier peek into the world of bond funds and my interest in this topic.
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Post by Fletchsmile on Sept 16, 2019 12:30:09 GMT 7
I looked into Baillie Gifford Strategic Bond B and GAM Star Credit since I'm also faced with a sizable holding (percentage wise) in Sanlam and am unsure what the takeover by Mann will bring. I'm unsure about GAM following the recent scandal and losses so I kinda set them aside for now. BG on the other hand I like, fund size is 1.1 bill. and the lead FM is alpha rated, their five year returns are OK but the yield is only 3.76%. I'll be keen to see what others have in mind here. I went with BG Strategic Bond in the end. It's been on my radar for a while.
I think there are better funds if chasing performance. But my priority is just a better return than cash over the medium term, which isn't subject to wild fluctuations. Seems to fit the bill for that
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