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Non correlated assets
Johann P
Posted: 10 November 2017 13:45:18(UTC)
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Joined: 12/07/2016(UTC)
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Hello.
Been sifting through my portfolio after a summer of appropriate reading, trying to simplify matters somewhat. Various funds have found their way into the bin. It's made up exclusively of OEICs (getting away from this a little will be the next phase). I still total about 30 holdings.
i'm struggling with what to buy as a counter to stocks. I currently hold Ruffer Total Return (6%), Troy Trojan (5%), City Financial Absolute Equity/Polar Capital UK Absolute Equity (5%), Ruffer European (4%), AXA Sterling IL Gilts (4%), GAM Star Credit Opps (3%), CF Miton Cautious Multi Asset (2%) and Gold Miners fund (2%). I'm also sat on about 16% cash (basically as i can't make much of a case for sticking it anywhere at the moment!).
All the above are what I hope will offer some protection should markets fall. I'd appreciate any help with what to add / take away to best accomplish this.
Like most people I've had a decent couple of years and therefore have been trying to take a bit of risk off the table, equities are now around 65%, that's whereabouts i want them for now, perhaps a touch lower. My ongoing pruning should hopefully take care of that.
Any help gratefully appreciated.
John
Law Man
Posted: 19 November 2017 15:06:53(UTC)
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Joined: 29/04/2014(UTC)
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I agree wealth preservation funds: PNL RICA CGT SIGT.

If bonds, I suggest a short duration bond ETF EPIC = IS15. As interest rates rise, long duration values fall.

Gold is a personal choice.

At present you hold 30 OEIC funds, you say. Are you sure they each add something: not an expensive index tracker.
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Johann P on 19/11/2017(UTC)
Mr Helpful
Posted: 19 November 2017 16:14:54(UTC)
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Joined: 04/11/2016(UTC)
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Johann P;53109 wrote:

i'm struggling with what to buy as a counter to stocks. I currently hold Ruffer Total Return (6%), Troy Trojan (5%), City Financial Absolute Equity/Polar Capital UK Absolute Equity (5%), Ruffer European (4%), AXA Sterling IL Gilts (4%), GAM Star Credit Opps (3%), CF Miton Cautious Multi Asset (2%) and Gold Miners fund (2%). I'm also sat on about 16% cash (basically as i can't make much of a case for sticking it anywhere at the moment!).
All the above are what I hope will offer some protection should markets fall. I'd appreciate any help with what to add / take away to best accomplish this.
been trying to take a bit of risk off the table, equities are now around 65%, that's whereabouts i want them for now, perhaps a touch lower. My ongoing pruning should hopefully take care of that.
Any help gratefully appreciated.
John


Traditionally investors split their portfolio into :-
+ Stocks (the risk-side)
+ Fixed Income = Bonds and/or Cash (the defensives)

Some of the Funds/Trusts mentioned above are hybrids, containing
Stocks + Bonds + Other (such as Gold).
It pays to check under the bonnet to see whether they are truly non-stocks and thus a full counter-balance to the Stocks already held elsewhere in the portfolio, or just a partial counter-balance (not necessarily a bad thing).

With Bonds esp the shorter duration and hence less interest rate sensitive Bonds offering sub-inflation yields; attention has turned in some desperation in searching for yield, to the so-called 'Fixed Income Alternatives', which in the past investors might possibly have allocated to their Stock or risk-side. These include :-
+ Commodity Income
+ Real Estate
+ Renewable Energy
+ Infrastructure

Now the big question, which will be answered in due course, is how will these 'Alternatives' hold up when Stocks take a dive?

P.S. second Law Man's suggestion of short-duration IS15 for Bonds.
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Johann P on 19/11/2017(UTC)
Johann P
Posted: 19 November 2017 17:19:05(UTC)
#4

Joined: 12/07/2016(UTC)
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Thanks gents. Got to the weeding stage about a week late. You’re right, I hold too many. I’ve held up relatively “alright” during the recent market dribble downwards, had I weeded (I.e got rid of 5 funds and moved it to others I already hold) all would be significantly rosier.
I maximum weight a fund at 6% for fear of one impacting excessively negatively. (Woodford would be a good example, I hold him at 4%, is responsible for 25% recent “damage”). Things have performed better than a tracker but agree could’ve been better.
I’d be grateful of your expanding on the acronyms Law Man, excuse my ignorance!
Thanks again gents.
John
chubby bunny
Posted: 19 November 2017 17:53:40(UTC)
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Joined: 31/10/2016(UTC)
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The acronyms are the EPIC codes (i.e. tickers) for several defensive investment trusts. Type them into the search box on hl.co.uk etc. for more information.

PNL = Personal Assets Trust (similar to Troy Trojan)
RICA = Ruffer Investment Co. (similar to Ruffer Total Return)
CGT = Capital Gearing Trust
SIGT = Seneca Global Income & Growth Trust
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Johann P on 19/11/2017(UTC)
Mickey
Posted: 19 November 2017 18:33:32(UTC)
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Johann P;53417 wrote:
...I maximum weight a fund at 6% for fear of one impacting excessively negatively. (Woodford would be a good example, I hold him at 4%, is responsible for 25% recent “damage”). ...

That's interesting, my minimum is around 5% and max is currently a little over 20%. I like the simplicity of 10 @10% but note that john Baron has some 22 holdings in his popular portfolios Summer & Autumn.
Johann P
Posted: 20 November 2017 12:03:02(UTC)
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Joined: 12/07/2016(UTC)
Posts: 3

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Went through my pension every which way and coincidentally 22 is what I came to. Conversely I’m looking at an isa consisting of seven. 30 is too many, whichever way you look at it, too many to get to “know”, some duplication and you end up wondering what you bought them for. I’m by no means a stellar expert investor, just hoping to get a bit better!
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