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Am i diversified enough?
Posted: 17 April 2017 21:26:25(UTC)

Joined: 15/03/2017(UTC)
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In a similar situation to Arnhemrd, retired and would welcome comments on my portfolio. I want to trim this down and add some trackers to cut down costs. Any help appreciated

Allianz Gilt Yield
Artemis Global Income
Black rock Corporate Bond D Inc
Fidelity Moneybuilder Income Y
Henderson UK Property PAIF Feeder
Invesco Perpetual Corporate Bomd Z Inc
JPM US Equity Income C
Jupiter Strategic Bond
Legg Mason Brandywine Global Fixed Income X Acc
Royal London UK Equity Income M
Standard Life Investments Global Index Linked Bond Ret
Standard Life UK Real Estate Income Feeder
Templeton Global Total Return Bond
Posted: 18 April 2017 19:12:48(UTC)

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I am sorry not to have received any advice on my question. Being new to this Forum I unfortunately do not have the necessary experience required to ask this question using the correct financial terms. From my research on here, there are contributors who have vast knowledge and whose comments make very interesting reading.
Sara G
Posted: 18 April 2017 19:58:00(UTC)

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I hold the following index tracker funds in roughly equal amounts:


I top up in small amounts, which, as they are funds rather than ETF's is free on some platforms.

You may prefer to hold a single international fund tracking the whole market - I think all of the providers listed above offer one. I don't do this myself as an international tracker is at least 50% in the US and I prefer to choose the weightings myself.

You may find you don't need the Global Income fund once you have a Tracker portfolio.

One thing though, unlike your existing holdings Trackers will not have an income focus, so this may offset cost savings. If you wanted to go for an investment trust, Murray International (MYI) has done well lately and offers a yield of 3.95% - cost is low for an actively managed fund at 0.68%.

I can't comment on the bond funds, but it should be possible to consolidate a little. You may find the thread on the John Baron Portfolios of interest in this regard.
4 users thanked Sara G for this post.
Jeff Liddiard on 18/04/2017(UTC), MJPM on 18/04/2017(UTC), S Dobbo on 19/04/2017(UTC), Martina on 20/04/2017(UTC)
Posted: 18 April 2017 21:54:20(UTC)

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Thank you Sara for your comments. Can I ask if you think we have too many funds, these were chosen for income by our IFA, however we no longer use the IFA. From my reading and research trackers are recommended for diversity, low cost and in the event the market drops they don't take such a hit.

We were going to take Income from the PF, however now I think we will just reinvest any gains. What is the disadvantage of having Income focus funds?
Sara G
Posted: 19 April 2017 09:25:12(UTC)

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I don't think you have too many funds, and wouldn't want to contradict the advice of a qualified IFA. Personally I have many more than that - about 25 currently.

I should also point out that I count my trackers as one fund, on which I'm making the active investing decisions...for me that's the paradox of passive investing, as I trade them more frequently and monitor them more closely than my active holdings.

As regards why passive funds are recommended, I would agree that they offer low cost access to total markets (and therefore diversification), but do not agree that they take less of a hit in a downturn - in fact the reverse may be the case, since an active manager may be taking decisions that are designed to preserve capital to some extent (that's certainly true with something like Murray International, and even moreso with a mixed vehicle like RIT Capital Partners).

Of course if the active manager makes the wrong move, they may end up doing worse than a Tracker, but it isn't a given. My approach is to time my purchases of Trackers so that I buy more when markets are down, and as a result my returns have exceeded the headline figure for the markets being tracked. (NB I tend not to sell when markets appear over-valued as you never know if they may go higher still.) Others buy Trackers and leave them alone because they are content to achieve the average return of the market, while eliminating the risk that an active manager will perform poorly.

There isn't a disadvantage with an income focus as such - it depends on your circumstances, and as you are retired, income is no doubt a priority. If you were in your twenties I would say that the disadvantage is that you may be missing out on growth potential by focusing on income - although even then, it is said that the majority of returns come from dividends.
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MJPM on 19/04/2017(UTC)
King Lodos
Posted: 19 April 2017 16:41:44(UTC)

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I was going to reply to this thread, but really the funds you've got look very sensible to me.

I hear – at least in the US – active bond funds are generally ahead of passives over 10 years now .. Now that is going to be debatable, because benchmarking in bond funds is difficult, but I think with all this forced buying of bonds, active managers have every opportunity to add value.

There's a good argument you can achieve all the diversification and risk exposure you need with a FTSE World tracker and a Global Bond tracker – or something like Vanguard Lifestrategy 60, that gives you both .. If I were building a simple buy-and-hold portfolio from scratch, I'd possibly start with a Lifestrategy fund, and add maybe RIT Capital Partners, as a highly active counterpart, giving you exposure to everything else: Private Equity, Real Assets and Hedge Funds.

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MJPM on 19/04/2017(UTC), Bellabeck on 19/04/2017(UTC)
Posted: 15 June 2017 14:31:08(UTC)

Joined: 14/02/2017(UTC)
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arnhemrd;43158 wrote:
I'm about to start the process of tweaking my ISA portfolio before adding 20k in April. Trying to diversify but with no real method behind it. Are there any areas, sectors or allocations that I may have missed out. I realise there is some duplication but any regions, sectors, or holdings that you feel I should focus on? Emerging Markets has been suggested, but they do seem to be higher risk so possibly not suitable for my age group. Portfolio pot at the moment is approximately 250k. I'm 63, retired and can live comfortably on my private pension so I'm just looking to let this pot grow in the future to pay for health care or to leave to my son. Cash pot of 35k retained in best interest paying bank accounts. Any observations or suggestions please. Thanks.

Asset Allocations:-

Vanguard LS 80% Acc 38.42%

CF Woodford Equity Income C Acc 21.19%

Old Mutual Managed R Acc 12.85%

Old Mutual UK Mid Cap R Acc 7.26%

Royal Dutch Shell B 5.28%

Vanguard FTSE Developed
World ex UK Equity Index Acc 5.06%

Vanguard Global Small Cap Index Acc 5.06%

Vanguard FTSE Developed
Europe ex UK Equity Index Acc 4.89%

Here's the finished portfolio following tweaking and adding new ISA money.

Total value up to about £292K up until today.

Anyone got any thoughts or comments?

CF Woodford Equity Income C Acc 20.08%

HSBC European Index C Acc 3.66%

HSBC Global Strategy Dynamic Portfolio C Acc 17.64%

Vanguard Emerging Markets Stock Index Acc 5.31%

Vanguard Global Small Cap Index Acc 9.06%

Vanguard LS 80% Acc 44.25%

Thanks, John.

King Lodos
Posted: 15 June 2017 18:34:01(UTC)

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I'd say it depends how often you'll be adding to the portfolio, and how much you want to be able to preserve capital in the event of market falls.

It's very underdiversified by asset class – fine when markets are going up, but sometimes markets spend 5+ years going the other way .. in which case it could be quite disappointing.

Seeing your portfolio lose 30-50% in value is also emotionally difficult for some – which compels some of the more dangerous market behaviours, like holding on too long then selling out at the bottom when it feels like they'll never stop falling .. Hawksmoor run some very diversified portfolios that do a great job of catching market upside while limiting volatility and falls – they look more like this:
3 users thanked King Lodos for this post.
Mr Helpful on 16/06/2017(UTC), Jim S on 16/06/2017(UTC), Jenki on 19/06/2017(UTC)
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