Fund choice in managed funds for retired couple

[PMU]

Q1. if property prices and rents have risen so much in many European countries, how come the Eurozone Property fund has done the worst? It's peak was 13,600, now at 12,400? This is the worst preforming fund by a long way.

Eurozone property.

The Eurozone Property fund is performing poorly because some of the constituent companies in the EPRA European Property Index, in which the fund invests via an ETF, have performed very very poorly. EPRA has produced a report this month on inflation and European property values that concluded inter alia that “The current inflationary pressure is likely to be temporary and its short-term impact should represent a positive driver for the listed real estate industry in Europe”. Inflation_Analysis_-_February_2022_1644232083444.pdf (epra.com) . Of course, many would say that these reports should be taken with a grain of salt. [Note, I’ve a very small investment in this fund, and am evaluating this holding.]

Q2. Unless there is some sort of disaster, these funds will never be encashed. If cash is required for long-term care, there are deposits available. Given that, should we do a fund switch? Get out of Eurozone Property, Eurozone Equity, Dividend Growth?

Eurozone Equity

Eurozone equities are a key holding for eurozone investors. You get equity returns without exchange rate risk. If volatility is not an issue you should consider retaining this investment. [Note, I’m retired and I’ve 20% of my holdings in eurozone equities, and I’ve no intention of reducing this investment. Then again, my attitude to risk may be different to yours.]

Q3. I realise there is overlap between these funds. The three mixed funds probably hold the same shares, but just in different weights with bonds. The three mixed funds hold eurozone equities, and bonds. Is there an argument to simply hold one mixed fund?

All your managed funds have different objectives. If the fund managers meet these objectives, why change? Remember, fund switching costs in that you will be selling at the bid and buying at the offer.

If you have deposits, i.e. guaranteed by the Deposit Guarantee Scheme, you have, in effect, risk-free bonds, although admittedly they currently pay little or no interest. So why are you investing in the Long Bond Fund? Long term bonds carry interest rate risk, i.e. when interest rates rise, the price of fixed-rate bonds falls. The US Securities and Exchange Commission has issued an investor bulletin on this ib_interestraterisk.pdf (sec.gov) that it might be prudent to read. [I'm retired, but I've no investments in long-term bonds. It is sort of a bet on your life expectancy vs the maturity of the bond.]

[Disclaimer: The above is comment / observation and is not a recommendation to follow any particular investment strategy or to buy / not buy any particular fund or stock.]

 

[Protocol]

I dont think these elderly people should be encouraged to be involved in managed funds or shares or advised to do so after saving and working hard all their lives.Perhaps State Savings or cash so that they can sleep sound and have peace of mind.Just my humble opinion.

Some managed funds / shares can be part of assets after retirement,

Retirement can be 25 years long.

 

[Protocol]

IGNORE

 

[DK123]

Some managed funds / shares can be part of assets after retirement,

Retirement can be 25 years long.

Perhaps 10 to 15% maximum of the portfolio for the "ordinary working man"?.