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Re-balancing My Portfolio For 2017
Shetland
Posted: 02 January 2017 08:39:24(UTC)
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Hi I am looking to remodel my portfolio and would be interested in any suggestions. We are in our early 60's, retired but only drawing one final salary pension, the other is due in 2 years. We have no need of income from the portfolio as our pension is sufficient but income may be the best way to get growth. I am holding a large amount of cash because I expected a market downturn, which didn't happen, to create buying opportunities. We have a separate rainy day cash sum so all the cash in the portfolio is available for investment. I would prefer It if I can get the timing right but will buy OEICS if the fund is right.It is a fairly large portfolio hence the number of stocks which will increase as the cash is invested. I have a separate SIPP portfolio which I shall deal with in another post.


Schroder Dynamic UK Smaller 7.7% OEIC
Jupiter European 6.5% OEIC
Marlborough Spec Sits 5.0% OEIC
Stewart Investors Glbl Emer Mkts 4.7% OEIC
Old Mutual Smaller Co 3.6% OEIC
Marlborough UK Micro Cap 3.4% OEIC
Liontrust Spec Sits 3.2% OEIC
JP Morgan Russian 3.1% IT
Aberdeen Global Emerg Mkts 2.6% OEIC
Scottish and Southern 2.5% Shares
Newton Asian Income 2.5% OEIC
Pacific Assets Trust 2.4% IT
Aberdeen Indian 2.3% OEIC
Schroder Oriental Income 2.3% IT
Old Mutual UK Mid Cap 2.2% OEIC
Rathbone Income 2.2% OEIC
Std Life UK Eq Unconstrained 1.6% OEIC
John Laing Infrastructure 1.0% IT
Std Life UK Smaller Co's 0.6% OEIC
BP 0.3% Shares
Baronsmead VCT 0.3% Shares
Foresight VCT 0.1% Shares
Cash 35.2%
kWIKSAVE
Posted: 02 January 2017 09:06:07(UTC)
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It looks a nice spread with some good funds so leave as is.

Wait until April for ISAs.
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dlp6666 on 03/01/2017(UTC), Guest on 03/01/2017(UTC)
Dian
Posted: 02 January 2017 09:46:55(UTC)
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I wish if I were you because of your discipline approach to investment and retirement plan. My congratulations!

I feel if you are in retirement age safety is the best defence but it can vary according to individual taste and experience and so on.

There are knowledgeable and experienced forum members and hope they will give some good suggestions to you. One more thing how about reducing your holding for less than 10 funds or stocks? In that way, it will make you to manage and monitor your portfolio easily. Do not forget how some lost retirement funds, savings and other investments through out the world during period of credit or financial crisis.
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Shetland on 02/01/2017(UTC)
Shetland
Posted: 02 January 2017 10:01:09(UTC)
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Thanks Dian. I can afford some risk, I have a 7-8 year horizon on this portfolio, maybe longer. Our final salary and state pensions will provide sufficient income and our SIPP's will provide for the care home fees if needed.
srg751
Posted: 02 January 2017 10:22:36(UTC)
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It's a portfolio betting on global growth. You've done your 'pertformance' research which is evident, but should markets suffer a pullback, like you've been waiting for, then you will feel more than your share of pain. 20%+ in EM and Asia,..... 25% in UK value/smaller companies,..... yet only 1% in JLIF.
The 35% cash won't protect your investments against losses, but it could be used to 'add' to them.

There's nothing wrong with your approach, it's down to risk tolerance, but sometimes it's good to look at things 'the other way around'. And, as the pullback that you waited for didn't happen, I would now establish a point where you will start to invest again, rather than guessing a bottom on a daily basis, which is what tends to happen. (Early last year I bought every time that the ftse dropped below 6000, for instance. )

3 users thanked srg751 for this post.
Shetland on 02/01/2017(UTC), dlp6666 on 03/01/2017(UTC), Pulpos on 04/01/2017(UTC)
Shetland
Posted: 02 January 2017 10:35:21(UTC)
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Thanks SRG. I used to treat this and my SIPP portfolio as one and get the right mix across both of them together. I now want to treat each separately. The amount of uninvested cash bothers me, I clearly got that wrong, however BREXIT will cause market volatity and I am expecting some market reaction when Article 50 is trriggered I am thinking about investing a significant part of this in defensive stocks such as SSE, Pennon and Jersey Electricity to at least benefit from the yield and then sell out of these and into more aggressive IT's on a dip in the market. I like your strategy of investing when the market goes below 6000. I am really looking for ideas of where to invest the cash. On my list so far are

Fidelity Spec Values
Blackrock Frontiers
HG Capital Private Equity
Rights and Issues
TR European
Marlborough European Multi Cap (OEIC)
Std Life European Private Equity
Dian
Posted: 02 January 2017 10:38:14(UTC)
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Quote:
I am holding a large amount of cash because I expected a market downturn, which didn't happen, to create buying opportunities.

Shetland

Same things happened to many people during last five years. They missed many trains.

Did you go through the following thread? I found some ideas there very useful.

http://moneyforums.cityw...portfolio-for-2017.aspx

For me simply, I will stay with great value (great business) for the time being.
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Shetland on 04/01/2017(UTC)
srg751
Posted: 02 January 2017 11:37:35(UTC)
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I would also add that, if you are going to hold those funds for the duration, I'd seriously consider swapping into I.Ts.
Over ten years you'd save over 10% in charges which roughly equates to 18 months average investor returns in the stock market. That's a lot of 'free' dough.

And when you add to your European exposure via the funds that you mention, try charting their performance together on a simple graph, (HL ?). They are remarkably similar in most cases,.....allowing for each ones 'moment in the sun'.
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Shetland on 02/01/2017(UTC)
Shetland
Posted: 02 January 2017 12:02:01(UTC)
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SRG. My plan is to move over to IT's when I start to buy. The difficulty is the choice is more more limited. For example, in my SIPP portfolio I have a large holding of Old Mutual UK Mid Cap which has done very well for me and I am trying to find a similar IT
King Lodos
Posted: 02 January 2017 13:31:59(UTC)
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One thing to be cognisant of is that we're likely to get more rates rises this year.

Markets can be rather myopic ... Right now they're pricing in growth expectations under Trump, but at some point the reality of rising rates is likely to bring equity valuations under pressure ... And it's rare the US sells off without other markets following.

I think 35% cash is fairly sensible .. It's about what Warren Buffett's holding at the moment .. Make the most of it with current account offers, maybe Virgin Money, or holding individual bonds to maturity when yields pick up.

I'd say you're overexposed to the UK market and underexposed to the US ... Overdiversified by fund (it may be an idea to set a minimum worthwhile fund holding size at 5%), and under-diversified by asset class..

There are still big threats out there – not least debt .. Markets may be thinking growth right now, but at some point in the next 7-8 years they're likely to shift attention back to capital preservation .. Maybe funds like Ruffer and Troy Trojan could act as useful diversifiers.

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Shetland on 03/01/2017(UTC)
Law Man
Posted: 03 January 2017 18:30:32(UTC)
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Not a comprehensive response, but:

1. Apart from the cash, you hold many high risk funds. Be ready to accept a 50% loss. Otherwise, I note you do not hold North America, which is half the global market. Consider a S&P 500 tracker such as VUSA.

2. Consider how much you are paying in fund management and platform charges.

3. Re investing the cash: like you I have held cash (15 - 20%) awaiting a correction. I shall keep 5 - 10% in cash, and feed the rest in over a period of at least 12 months. If shares continue to rise, I win. If they fall I can buy in at a lower price. No: I am not trying to time the market.
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Shetland on 03/01/2017(UTC), dlp6666 on 04/01/2017(UTC)
Shetland
Posted: 03 January 2017 18:44:00(UTC)
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Thanks law man. I would be interested to know which funds you think are high risk. What % do you think I should put in VUSA ? What other IT's would you suggest.

In this portfolio there are no platform charges but in my pension portfolio I am trying yo move from funds to IT's
Pensioner
Posted: 03 January 2017 23:10:52(UTC)
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I counted 22 different investments. Too many in my opinion. I would at 60 plus be more proactive. Look at your percentage return on each one and switch into the 4 to 8 showing the best percentage return to make your money grow. Check out inv.trust FRCL over 500 companies in 35 countries. Its at an all time high share wise and divi.wise. Also for a solid OEIC/ Fundsmith which holds companies going back to the early 20th Century, which is nimble ..... no more than 30companies. Try SMT (inv trst) with a leaning towards technology which is where the future lies. 2017 with the Brexit issue, the US with Donald Trump and European countires voting one way or the other this year and next. You want to be able to sleep at night and hopefully make it into your 90's. Good luck to you and the wife in a comfortable retirement.
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Pulpos on 04/01/2017(UTC), Shetland on 04/01/2017(UTC), Keith Cobby on 04/01/2017(UTC), Mickey on 04/01/2017(UTC)
Jon Snow
Posted: 04 January 2017 01:18:48(UTC)
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What is your goal.
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Shetland on 04/01/2017(UTC)
Shetland
Posted: 04 January 2017 07:49:30(UTC)
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Pensioner;41020 wrote:
I counted 22 different investments. Too many in my opinion. I would at 60 plus be more proactive. Look at your percentage return on each one and switch into the 4 to 8 showing the best percentage return to make your money grow. Check out inv.trust FRCL over 500 companies in 35 countries. Its at an all time high share wise and divi.wise. Also for a solid OEIC/ Fundsmith which holds companies going back to the early 20th Century, which is nimble ..... no more than 30companies. Try SMT (inv trst) with a leaning towards technology which is where the future lies. 2017 with the Brexit issue, the US with Donald Trump and European countires voting one way or the other this year and next. You want to be able to sleep at night and hopefully make it into your 90's. Good luck to you and the wife in a comfortable retirement.



The problem with only 20 investments is that becasue it is a large portfolio then each investment is very large.

Also,I am trying to get a good geographical mix. I was thinking of

UK 40%
AP 10% excl Japan
Emerging Mkts 10%
Private Equity 10%
Europe 10%
Global 10%
Japan 5%
USA 5%
Shetland
Posted: 04 January 2017 07:50:46(UTC)
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Jon Snow;41021 wrote:
What is your goal.



Capital Growth, which may in part come from income stocks and trusts.
I would prefer IT's rather than OEICS but will use OEICS when the fund has exceptional performance
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Jon Snow on 08/01/2017(UTC)
David Harmes
Posted: 04 January 2017 10:43:08(UTC)
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Shetland

I would also limit the number of investments to 20/25

I notice you have nothing in the USA which should be a very active market at least in the first year of the Donald Trump presidency.

You also have not very much in mining which was the most successful sector in the FTSE last year. I would recommend Blackrock World Mining (BRWM) as being a good investment trust in this area. The fund doubled in value last year.

Finally you have nothing in the Technology sector which is always a good sector in the global arena. The best investment trust in this area, in my opinion, is the Allianz Technology Trust (ATT) but even the Scottish Mortgage Trust (SMT) is increasingly present in this space.

In my opinion you are holding too much cash at the moment and need to reduce that to say 10%
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Shetland on 04/01/2017(UTC), dlp6666 on 04/01/2017(UTC)
Shetland
Posted: 04 January 2017 12:01:21(UTC)
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David Harmes;41030 wrote:
Shetland

I would also limit the number of investments to 20/25

I notice you have nothing in the USA which should be a very active market at least in the first year of the Donald Trump presidency.

You also have not very much in mining which was the most successful sector in the FTSE last year. I would recommend Blackrock World Mining (BRWM) as being a good investment trust in this area. The fund doubled in value last year.

Finally you have nothing in the Technology sector which is always a good sector in the global arena. The best investment trust in this area, in my opinion, is the Allianz Technology Trust (ATT) but even the Scottish Mortgage Trust (SMT) is increasingly present in this space.

In my opinion you are holding too much cash at the moment and need to reduce that to say 10%


Thanks David, some very useful suggestions.

I am thinking about the USA, see my suggested portfolio split above but always worry about the impact of currency fluctuations. A large part of the gains last year related to currency gains and while sterling may be weak initially this year it could well come back. Having said that I will put some money into that market, any suggestions for a good fund ?

Mining always worries me, I know it did well last year and that is partly why I am not planning to invest in it this year.

I agree with you about technology and am planning to invest, probably in SMT.

I have so many stocks because of the size of the portfolio, how much would you have in each stock before looking to increase the number above 25 ?

kWIKSAVE
Posted: 04 January 2017 12:52:15(UTC)
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I have no more than 25 stocks and 7 OEICS which is enough.

One can spread too thinly which makes decision making more difficult overall.

Easier to monitor too.

So when there is spare cash tend to double up on the either the best ones or possibly a laggard.
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Shetland on 04/01/2017(UTC)
Shetland
Posted: 04 January 2017 13:29:08(UTC)
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kWIKSAVE;41039 wrote:
I have no more than 25 stocks and 7 OEICS which is enough.

One can spread too thinly which makes decision making more difficult overall.

Easier to monitor too.

So when there is spare cash tend to double up on the either the best ones or possibly a laggard.


Thanks Kwiksave. How much would you have in each fund / OEIC before increasing the number of funds
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