Posted on 19 February 2014 by Douglas ChadwickI have had a long term discussion with Richard about the merits of introducing specialist funds into a low risk portfolio such as the Saltydog Tugboat portfolio. Specialist funds by their designation can be considered likely to have a more volatile performance than funds selected further down the risk chain from the “Steady as she Goes” group (UK Income funds) or the “Full Steam ahead Developed “group (UK small companies). His argument is that one should have a positive definitive financial gain when selecting such a fund. My approach is that there should be the opportunity to carry a small percentage of such a rogue fund. One that perhaps does not follow the rules, but has the future potential to fly. An example of such a fund is the “AXA Farmington Biotech” fund. This is one that I have carried on and off in my personal portfolio for the last three years. It is investing into companies which are working towards the future well -being of the world`s population-both in the development of drugs and also in medical technology, so this really ticks my interest box. However, following the Tugboat rules it would be ruled out for inclusion when compared with say “Miton UK Small Companies.” Here are the numbers.......
|Fund||3years||2years||1year||6 months||3 months||1 month||1 week|
|Miton UK sml||N/A||72%||57%||44%||18%||1.5%||2.5%|