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Help me choose last fund please
Frenchman 96
Posted: 17 April 2018 14:24:10(UTC)
#1

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Hi Guys

I now have
SMT
FS
LS 80/20
Van FTSE 250

And I fancy one of BG
Japan Trust
Shin Nippon
Edinburgh

Would welcome + and - of the 3 above.

3 users thanked Frenchman 96 for this post.
Malcolm Hartney on 18/04/2018(UTC), James Park on 18/04/2018(UTC), Guest on 18/04/2018(UTC)
john perceval
Posted: 18 April 2018 17:25:43(UTC)
#2

Joined: 04/01/2012(UTC)
Posts: 1

All three are great trusts, but I would choose Edinburgh worldwide. It's a global smaller companies trust. Shin Nippon is Japanese smaller companies and another great trust but is on a 12% premium. Also buy Monks which is like SMT but a bit less hairy.
paul armstrong
Posted: 18 April 2018 18:51:16(UTC)
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Without a rationale or statement objectives, impossible to say. What is wrong with some smaller company exposure, say a global size factor etf ? These tend to be heavy USA and Japan. You seem a bit light in USA and seem to fancy Japan.
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Guest on 18/04/2018(UTC), Jon Snow on 18/04/2018(UTC)
Big boy
Posted: 18 April 2018 19:16:00(UTC)
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Frenchman 96;60768 wrote:
Hi Guys

I now have
SMT
FS
LS 80/20
Van FTSE 250

And I fancy one of BG
Japan Trust
Shin Nippon
Edinburgh

Would welcome + and - of the 3 above.


Very simple buy the one on biggest discount. If on a premium look elsewhere.
3 users thanked Big boy for this post.
mcminvest on 18/04/2018(UTC), Keith Cobby on 19/04/2018(UTC), dlp6666 on 19/04/2018(UTC)
Jim S
Posted: 18 April 2018 19:22:38(UTC)
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Baillie Gifford Global Discovery is a global fund run by BG which is quite different from SMT, have you looked at that? Or BG Positive Change?

There's always Lindsell Train Global Equity if you don't mind non BG, also I think it includes some Japanese holdings if you like those so could be a good fit.

Shin Nippon's premium and narrow focus on Japanese small caps would put me off that being a 20% holding. Also, although they have a great team, Sarah Whitley did leave recently.

Legg Mason might be another one to look at if you are keen on Japan.

1 user thanked Jim S for this post.
mcminvest on 18/04/2018(UTC)
Law Man
Posted: 18 April 2018 19:51:36(UTC)
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Frenchman: I am with Paul A.

1. Look at what you want by way of asset allocation - c. 100% in equities? Spread over all regions?

2. If yes, what do you want to add? More in Japan?

3. Then what type of company? E.g. BGFD is larger cap, BGSN is small cap.

4. Only then can you choose the particular IT to meet your objectives.
2 users thanked Law Man for this post.
Jim S on 18/04/2018(UTC), Jon Snow on 18/04/2018(UTC)
Jon Snow
Posted: 18 April 2018 23:32:16(UTC)
#9

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You're going to have either an expensive tracker or a conviction portfolio, I'd add some FGT, but I'm not you!

Also, nothing is forever, don't expect to buy and forget, you need to keep a close eye on your stuff, don't get emotionally attached to something when logic says why?
2 users thanked Jon Snow for this post.
Aminatidi on 19/04/2018(UTC), gillyann on 20/04/2018(UTC)
King Lodos
Posted: 19 April 2018 01:34:28(UTC)
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I think there are some basic questions you have to be able to answer:

Why more than one fund?

If Fundsmith thought they could do better with a FTSE 250 tracker, or more Japan exposure, why wouldn't they buy one of those funds?

Diversification for the sake of diversification is usually diworsification .. What does having multiple funds achieve? They're all stocks, so what you're really doing is betting on 5 horses in the same race .. Is that what you want to do?


Why these particular funds?

I notice a few people today asking about funds on very strong 12 month returns .. And the question: if it's recent performance that makes you want to buy those funds, what's going to happen when they go through a period of very bad performance?

There's a good chance that what drew you to the fund, or sector, dissolves, and you buy the next thing that's done 12 months of good performance .. Performance chasing like that is usually a losing strategy.


And I'd always say, if you haven't got a good reason: why not just buy more Vanguard? Or more of the fund you know you'd stick with?

5 users thanked King Lodos for this post.
Rickenbacker Al on 19/04/2018(UTC), mcminvest on 19/04/2018(UTC), Tim D on 19/04/2018(UTC), Inderpal Singh Khalsa on 19/04/2018(UTC), dlp6666 on 19/04/2018(UTC)
Apostate
Posted: 19 April 2018 08:03:06(UTC)
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King Lodos;60860 wrote:
I think there are some basic questions you have to be able to answer:

Why more than one fund?

If Fundsmith thought they could do better with a FTSE 250 tracker, or more Japan exposure, why wouldn't they buy one of those funds?

Diversification for the sake of diversification is usually diworsification .. What does having multiple funds achieve? They're all stocks, so what you're really doing is betting on 5 horses in the same race .. Is that what you want to do?



The horse race analogy does not work because only one can win - shares aren't competing against each other in the same way. In stocks you can have 5 winners in a 5 horse race.
6 users thanked Apostate for this post.
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Fell Walker
Posted: 19 April 2018 08:38:40(UTC)
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Apostate;60868 wrote:

The horse race analogy does not work because only one can win - shares aren't competing against each other in the same way. In stocks you can have 5 winners in a 5 horse race.


Or 4 winners and 1 loser but you picked the loser where a spread would have been an advantage.

Why not have Fundsmith, LT Global and some other good global funds? It does depend rather on the amount that you are investing, I wouldn't spread out a few £k over more than one fund. But when it's 100's of £k it's good to spread.

IMO of course!
1 user thanked Fell Walker for this post.
Aminatidi on 19/04/2018(UTC)
mcminvest
Posted: 19 April 2018 08:57:31(UTC)
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Fell Walker;60870 wrote:
Apostate;60868 wrote:

The horse race analogy does not work because only one can win - shares aren't competing against each other in the same way. In stocks you can have 5 winners in a 5 horse race.


Or 4 winners and 1 loser but you picked the loser where a spread would have been an advantage.

Why not have Fundsmith, LT Global and some other good global funds? It does depend rather on the amount that you are investing, I wouldn't spread out a few £k over more than one fund. But when it's 100's of £k it's good to spread.

IMO of course!


Fell, what do you mean by a 'few'? Ta!
Fell Walker
Posted: 19 April 2018 09:01:46(UTC)
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mcminvest;60873 wrote:

Fell, what do you mean by a 'few'? Ta!



Global funds we have are:-

My SIPP:-
LT Global
FRCL

My ISA:-
Fundsmith
Baillie Gifford Global Discovery
Witan

My Trading:-
Fundsmith
Mid Wynd IT

Partners Trading:-
LT Global
Mid Wynd IT

Partners ISA:-
Fundsmith

Most are being added to monthly.
Edited: missed off Mid Wynd IT
Keith Cobby
Posted: 19 April 2018 09:12:45(UTC)
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Big boy;60850 wrote:
Frenchman 96;60768 wrote:
Hi Guys

I now have
SMT
FS
LS 80/20
Van FTSE 250

And I fancy one of BG
Japan Trust
Shin Nippon
Edinburgh

Would welcome + and - of the 3 above.


Very simple buy the one on biggest discount. If on a premium look elsewhere.


Is there any analysis/evidence that discounts are correlated with total return.
mcminvest
Posted: 19 April 2018 10:52:48(UTC)
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Fell Walker;60874 wrote:
mcminvest;60873 wrote:

Fell, what do you mean by a 'few'? Ta!



Global funds we have are:-

My SIPP:-
LT Global
FRCL

My ISA:-
Fundsmith
Baillie Gifford Global Discovery
Witan

My Trading:-
Fundsmith

Partners Trading:-
LT Global

Partners ISA:-
Fundsmith

Most are being added to monthly.



Thanks Fell, very interesting info and will note but what I was asking was what you meant by "I wouldn't spread out a few £k over more than one fund." i.e. what is a "few k"? Sorry I wasn't clearer first time.
Big boy
Posted: 19 April 2018 12:45:32(UTC)
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Keith Cobby;60877 wrote:
Big boy;60850 wrote:
Frenchman 96;60768 wrote:
Hi Guys

I now have
SMT
FS
LS 80/20
Van FTSE 250

And I fancy one of BG
Japan Trust
Shin Nippon
Edinburgh

Would welcome + and - of the 3 above.


Very simple buy the one on biggest discount. If on a premium look elsewhere.


Is there any analysis/evidence that discounts are correlated with total return.


Yes using largest discounts I was a top performer (offshore Far East Sector) over 7 years. Other funds tended to invest direct into equities. It makes sence to me that paying 75% of stock market quote is better than paying 100%.
You then wait for the Trust and sector to come back into favour.
If the local supermarket offers a 25% discount on a product we don't go down the road and pay fall price.
Tim D
Posted: 19 April 2018 13:00:52(UTC)
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mcminvest;60885 wrote:
what I was asking was what you meant by "I wouldn't spread out a few £k over more than one fund." i.e. what is a "few k"? Sorry I wasn't clearer first time.


My approach to working out what the minimum amount it's worth investing follows from some base assumptions:

1. Any holdings are invested for 5 years minimum.
2. It'll cost me £10 in dealing charges to get in, and £10 to get out.
3. I don't want dealing costs to add the equivalent of more than 0.1%pa in charges.

So solving (2*10)/5 < 0.001*X where X is the amount invested yields X>£4000.

So if I have say £20K to invest, I shouldn't spread it around more than 5 x £4K investments, at least not if I want to keep the impact of dealing charges below that 0.1%. Other folks may have their own parameters.

I occasionally make exceptions down to £2K for what I hope are buy-and-hold-forever single company stocks for the income portfolio.
3 users thanked Tim D for this post.
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Keith Cobby
Posted: 19 April 2018 13:15:17(UTC)
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I would say a minimum should be 5% to have a meaningful holding within your portfolio irrespective of value. So £1000 for a £20000 portfolio. Too many holdings betrays conviction and becomes a tracker.
King Lodos
Posted: 19 April 2018 13:36:41(UTC)
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Apostate;60868 wrote:
King Lodos;60860 wrote:
I think there are some basic questions you have to be able to answer:

Why more than one fund?

If Fundsmith thought they could do better with a FTSE 250 tracker, or more Japan exposure, why wouldn't they buy one of those funds?

Diversification for the sake of diversification is usually diworsification .. What does having multiple funds achieve? They're all stocks, so what you're really doing is betting on 5 horses in the same race .. Is that what you want to do?



The horse race analogy does not work because only one can win - shares aren't competing against each other in the same way. In stocks you can have 5 winners in a 5 horse race.


Of course you don't just have to bet on winners .. You can bet on who comes 2nd, 3rd, etc.

Regardless, one of the funds you hold is going to be the winner, and it's easier to pick one winning idea than it is to pick 5 .. and if you do pick 5, maybe you don't really have any insight?
1 user thanked King Lodos for this post.
Aminatidi on 19/04/2018(UTC)
Fell Walker
Posted: 19 April 2018 14:55:12(UTC)
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mcminvest;60885 wrote:

Thanks Fell, very interesting info and will note but what I was asking was what you meant by "I wouldn't spread out a few £k over more than one fund." i.e. what is a "few k"? Sorry I wasn't clearer first time.



Pretty similar to Tim D really, I wouldn't normally trade/hold less than £4k.

If the time is right I sometimes add a couple of £k to a fund as a monthly regular investment which is £1 rather than £10 then delete the regular investment!

Regarding discounts, I tend to look at the discount compared to average over the year to see if I think it's in bargain territory. A discount of -10% on a fund that's normally at a premium is as good as a -20% discount on a fund normally trading at -10% to me. I don't see how -30%+ is so magical on a fund that never gets near the NAV, even more so if it's bloated with hard to judge investments.
Apostate
Posted: 19 April 2018 14:56:03(UTC)
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King Lodos;60896 wrote:
Apostate;60868 wrote:
King Lodos;60860 wrote:
I think there are some basic questions you have to be able to answer:

Why more than one fund?

If Fundsmith thought they could do better with a FTSE 250 tracker, or more Japan exposure, why wouldn't they buy one of those funds?

Diversification for the sake of diversification is usually diworsification .. What does having multiple funds achieve? They're all stocks, so what you're really doing is betting on 5 horses in the same race .. Is that what you want to do?



The horse race analogy does not work because only one can win - shares aren't competing against each other in the same way. In stocks you can have 5 winners in a 5 horse race.


Of course you don't just have to bet on winners .. You can bet on who comes 2nd, 3rd, etc.

Regardless, one of the funds you hold is going to be the winner, and it's easier to pick one winning idea than it is to pick 5 .. and if you do pick 5, maybe you don't really have any insight?


The horse racing analogy is way off. Fund managers choose many stocks for their funds - why don't they just choose one? Do they lack insight? No they don't because there can be multiple winners in the stock markets.
2 users thanked Apostate for this post.
dlp6666 on 19/04/2018(UTC), Tim D on 19/04/2018(UTC)
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