A "Quality" ETF or a "Low Volatility" ETF might fit your requirements well. The idea is that these are more stable companies - so they are less likely to cut their dividends and should be less volatile in share price.*Thanks Value Thinker. I need to go away and do some research on all the topics youve mentioned. still not sure about how to progress but certainly more food for though at the very least.You might find that complements your existing holdings quite well - limited overlap.
Note that if interest rates are rising, these sorts of stocks tend to do relatively poorly, because the alternative, ie bonds, is more attractive to investors. However at least for the moment, we seem to be finished with this cycle of Central Bank interest rate rises.
However the historic stability these types of funds have shown was not well-reflected more recently. This often happens with "investing anomalies" -- they get discovered, and then they don't reoccur.
I do suggest a good skim through monevator.com which has a lot of sensible things to say about investing from a UK bogleheadish perspective. Ex hedge fund manager.
* there are also "Dividend Achiever" funds at least in USA. Companies that have always maintained, or increased, their dividends. The yields tend to be much lower, but the income return should be more stable.
Quality is a proxy based on the fund manager's view of what, historically, has created that sort of quality stock. AB Foods comes to mind - a boring grocery business (British Sugar) complemented by a high growth retailer (Primark). Under family control (the Westons) with a view to long term sustainability (as a business). Of course, the danger always is that the market changes, and the company cannot adapt. Shein v Primark for example. (Primark doesn't even have an online store, I believe).
Low volatility is a statistical observation on the properties of the stock. You usually get a lot of utilities in there. I had to run a low vol North American portfolio - legacy personal pension, limited to stocks only, no funds - and that worked for me (broadly). Healthcare, utilities, consumer staples. One oil company (CNQ - Canadian Natural Resources) w a long run track record of shareholder value creation.
Statistics: Posted by Valuethinker — Mon Jan 08, 2024 3:40 am — Replies 5 — Views 499