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Critique my portfolio please
Jan Bloomberg
Posted: 22 May 2018 14:34:15(UTC)
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Thanks to all those who have contributed recently, I've been looking to rebalance my ISA portfolio and move away from individual companies, which have been an odd mix, showing me that maybe my busy lifestyle doesn't allow me to assess individual companies, not only this, but compared to stellar progress of FGT and SMT over the last year, its opened my eyes to ITs and I firmly believe the people running those know a hell of a lot more than me about picking and investing.

So, with this in mind I rebalanced to a long term mix, and I am looking to add some others as time progresses, this is long term invested and leave, with a rebalancing/review every 12 months or in the event of a catastrophic market effect.

Here goes:

Global - Scottish Mortgage Trust
Japan - Baillie Gifford Shin Nippon
UK - Finsbury Growth & Income
Private Equity - Pantheon International Plc
Asia (ex. Japan) - Pacific Horizon
Frontier Markets - Jupiter Emerging & Frontier Markets
European - TR European Growth

Further down the line I will be looking to add:

- Property (Picton Property Income)
- Mining (Blackrock World Mining)
- Commodities (Blackrock Commodities)

I realise I should have got into Mining and Commodities about a year ago, but hey... hindsight and all that.

I've deliberately avoided a set US trust as I feel the best are covered within SMT.
2 users thanked Jan Bloomberg for this post.
c brown on 23/05/2018(UTC), John Grant on 23/05/2018(UTC)
Mr Helpful
Posted: 22 May 2018 15:02:07(UTC)
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Jan Bloomberg;62665 wrote:
1. its opened my eyes to ITs and I firmly believe the people running those know a hell of a lot more than me about picking and investing.
2. this is long term invested and leave, with a rebalancing/review every 12 months or in the event of a catastrophic market effect.
3. - Mining (Blackrock World Mining)
- Commodities (Blackrock Commodities)

1. Welcome to the (IT) club.
Should open up more time to think about strategy.

2. There are two kinds of regret :-
- Not fully invested as Stocks surge.
- Lack of dry powder to pick up bargains when Stocks slump.
Probably no single correct answer, as haven't come across anyone yet who knows for sure in advance how market history will pan out.

3. Bit of an overlap?
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Jan Bloomberg on 23/05/2018(UTC)
Tom Bards
Posted: 22 May 2018 15:04:32(UTC)
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I'm sure others will go into the actual holdings so instead I'll just say something about charges. As you have majority IT's, you should remember that these are expensive.


Pantheon International Plc - Charges 3.94% which is extortionate, what is your motivation for holding this?

Jupiter Emerging & Frontier Markets - Charges 1.61%, do you really need this? I think Pacific Horizon is enough for Emerging Markets.

Shin Nippon is an excellent IT but with costs and the premium, maybe consider the fund equivalent instead and move into Shin Nippon when the premium comes down.

I would also advise staying away from the mining/commodity holdings, there are better sectors to hold if that's the motivation.
1 user thanked Tom Bards for this post.
Jan Bloomberg on 23/05/2018(UTC)
Daniel Downing
Posted: 22 May 2018 22:15:39(UTC)
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Joined: 16/03/2018(UTC)
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Yes, I too would advise against Trusts focused on niche sectors. Mining stocks are notoriously volatile. Therefore it is no surprise that the long term growth in those trusts is lacklustre.
Daniel Downing
Posted: 22 May 2018 22:54:08(UTC)
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Joined: 16/03/2018(UTC)
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I too did sell off shares in trusts recently due to the high (>1%) charges.
Yes, I would avoid any fund/trust which charges more than that.
Just a 1% p.a charge will reduce your investment value by 25% over 30yrs.

Both trusts I sold my shares in were strong performers over the past 5 years.
They had returned 340% an 190% approx. I had only held for the last two months.
Both charged over 2% p.a.

The stocks I have now have shares in, in my SIPP are:

Baillie Gifford Shin Nippon (BGS): 22.9%
TR European Growth Trust (TRG): 12.1%
Independant Investment Trust (IIT): 12.0%
TR Property Investment Trust (TRY): 11.9%
Allianz Technology Trust (ATT): 11.8%

iShares EU Govt Bond 15-30 Yr ETF: 16.4%
iShares EU Govt Bond 10-15 Yr ETF: 12.5%

If anyone would critique my portfolio here aswell that too would be appreciated.
Jan Bloomberg
Posted: 23 May 2018 08:41:14(UTC)
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Tom Bards;62668 wrote:
I'm sure others will go into the actual holdings so instead I'll just say something about charges. As you have majority IT's, you should remember that these are expensive.


Pantheon International Plc - Charges 3.94% which is extortionate, what is your motivation for holding this?

Jupiter Emerging & Frontier Markets - Charges 1.61%, do you really need this? I think Pacific Horizon is enough for Emerging Markets.

Shin Nippon is an excellent IT but with costs and the premium, maybe consider the fund equivalent instead and move into Shin Nippon when the premium comes down.

I would also advise staying away from the mining/commodity holdings, there are better sectors to hold if that's the motivation.


I appreciate the response and insight, thanks

I understand that ITs aren't the cheapest route but that being said, based on my experience so far the returns have been greater than what I achieved in stocks, irrespective of costs, I am comfortable getting a base portfolio in ITs and then adding individual stocks in companies I like afterwards, I feel this is a safer way for me personally to go about constructing a portfolio.

Specifically regarding the two you mentioned, I see the Jupiter IT as more of a Frontier route then an Emerging route, its the racier part for potential long term gains, I also liked that it is a new trust with a lot of potential. Pacific Horizon is more of an Asian market route outside of Japan, there will inevitably be some geographical overlaps between the two, but the Jupiter product accesses markets that PA doesn't.

With regards to Pantheon, I understand costs are higher, but I do a lot of work for PE companies such as Carlyle, CVC, Advent, Corsair, Pantheon and Paulson. I like their approach in this space and I have seen firsthand how Pantheon have evolved over the last 10 years. I am giving this a trial over the next 12 months and if the returns make the costs less justifiable I will cut it, I believe PE has massive potential to tap into companies and avenues that the wider market cannot and I want a piece of it.
2 users thanked Jan Bloomberg for this post.
John Grant on 23/05/2018(UTC), Sara G on 25/05/2018(UTC)
Jim S
Posted: 23 May 2018 09:23:17(UTC)
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Hi Jan

I several of the same holdings. I'm a Pantheon fan, its the biggest holding in my SIPP now, but must admit I hadn't realised their charges were so high until I read Tom's post.

You could maybe do with a bit more global 'quality' - Lindsell Train Global Equity and/or Fundsmith Equity maybe, there are other funds in this space I am less familiar with. These should be less voliatile and tech-centric than SMT so would complement it.

Also maybe a good global smaller companies? I have FCS, but Standard Life Global Smaller companies might be another option.

For Europe, I'm a fan of Fidelity European which has a quality tilt to complement TRG which is more smaller company/growth. For US, I think Baillie Gifford's US Growth IT is now at a premium, but their OEIC has also done well if I recall.

I wouldn't bother with both commodities and mining.

India's been fairly quiet for the last year, so maybe a very small % in IGC would be timely.

I shouldn't keep banging on about Burford but... :)

Dian
Posted: 23 May 2018 09:24:34(UTC)
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When I was googling, I saw the following.

Quote:
Global investing: Don’t follow the crowd
When it comes to international investing, it’s easy to get caught up in the latest trend. Instead, you may want to do the opposite. Look for high-quality, predictable companies trading at a reasonable price. Go into areas where no one else wants to go. Go into sectors or geographies that are a bit out of favour. Look for companies with stellar balance sheets and limited competition – profitable businesses even when conditions are challenging
.

Keith Cobby
Posted: 23 May 2018 10:04:34(UTC)
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Russia is out of favour but not sure I want to invest there!
2 users thanked Keith Cobby for this post.
Mr Helpful on 23/05/2018(UTC), Aminatidi on 23/05/2018(UTC)
Daniel Downing
Posted: 23 May 2018 10:25:41(UTC)
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Joined: 16/03/2018(UTC)
Posts: 7

In reply to the initial post, I would advise against investing in any fund or trust that charges more than 1% p.a as just this amount alone is enough to wipe 25% off your investment growth over a 25 years.

I had myself bought shares in two trusts that had done fantastic over the last 5 years but decided to sell after holding for just 3 months as I did not fancy the 2% p.a charges.

I hold shares in other trusts that have done well but all charge up to 1% p.a.
Tom Bards
Posted: 23 May 2018 10:40:25(UTC)
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Daniel Downing;62736 wrote:
In reply to the initial post, I would advise against investing in any fund or trust that charges more than 1% p.a as just this amount alone is enough to wipe 25% off your investment growth over a 25 years.

I had myself bought shares in two trusts that had done fantastic over the last 5 years but decided to sell after holding for just 3 months as I did not fancy the 2% p.a charges.

I hold shares in other trusts that have done well but all charge up to 1% p.a.



Which ones? There are hardly any trusts that charge under 1% with everything included, I would wager the ones you think charge under 1% actually charge more than that .
Daniel Downing
Posted: 23 May 2018 11:05:35(UTC)
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Joined: 16/03/2018(UTC)
Posts: 7

The stocks I have now have shares in, in my SIPP are:

Baillie Gifford Shin Nippon (BGS): 22.9%
TR European Growth Trust (TRG): 12.1%
Independant Investment Trust (IIT): 12.0%
TR Property Investment Trust (TRY): 11.9%
Allianz Technology Trust (ATT): 11.8%

iShares EU Govt Bond 15-30 Yr ETF: 16.4%
iShares EU Govt Bond 10-15 Yr ETF: 12.5%
Tom Bards
Posted: 23 May 2018 11:41:08(UTC)
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Daniel Downing;62740 wrote:
The stocks I have now have shares in, in my SIPP are:

Baillie Gifford Shin Nippon (BGS): 22.9%
TR European Growth Trust (TRG): 12.1%
Independant Investment Trust (IIT): 12.0%
TR Property Investment Trust (TRY): 11.9%
Allianz Technology Trust (ATT): 11.8%

iShares EU Govt Bond 15-30 Yr ETF: 16.4%
iShares EU Govt Bond 10-15 Yr ETF: 12.5%



Good trusts, no doubt but I'm pretty certain that all of them except Independent cost in excess of 1% after performance, transaction and platform fees are included. The 'ongoing charge' figure is never the full story when it comes to charges unfortunately.
Daniel Downing
Posted: 23 May 2018 11:51:34(UTC)
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Posts: 7

For my SIPP I use X-O/Jarvis.
I pay £5.95 to buy/sell a stock. That's it.
Even their annual management charge is refunded.
I got £500 tax relief on £2000 deposit aswell.

I'm more disappointed with the MIFID regs that came in because I really wanted to invest in 4-5 US ETFs.
Who needs a KIDD document when a factsheet is quite enough?
Daniel Downing
Posted: 23 May 2018 12:00:35(UTC)
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Joined: 16/03/2018(UTC)
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I also have an ISA for which I used Cavendish/Fidelity.
0.25% p.a charge for that. I'm up 4.3% in 3 months.
No transaction fees for buying, switching, selling units.

The next broker I would use is AJ Bell as they have a much larger selection of funds to chose from.
Tom Bards
Posted: 23 May 2018 12:07:24(UTC)
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Daniel Downing;62744 wrote:
For my SIPP I use X-O/Jarvis.
I pay £5.95 to buy/sell a stock. That's it.
Even their annual management charge is refunded.
I got £500 tax relief on £2000 deposit aswell.

I'm more disappointed with the MIFID regs that came in because I really wanted to invest in 4-5 US ETFs.
Who needs a KIDD document when a factsheet is quite enough?



Perhaps because a fact sheet is not enough and never shows the actual cost of holding the investment. Factsheets only show OCF figures which is only half of the story.

Further, when talking about transaction fees I'm referring to the transactions within the trust which are charged to the investor. OCF figures never includes transaction costs. I.e. SMT OCF is 0.44% but including transaction costs within the fund, the actual charge is 0.84%.

Take another example, Independent Investment Trust OCF is 0.25% but including other ongoing charges the actual cost is 0.32%. Still very cheap but still more expensive than the OCF indicates. Without the KID, people would still be looking at the OCF and thinking that's the total charge.

I cannot find the KID for Shin Nippon at the moment but I remember although the OCF is 0.97% the actual total cost is closer to 1.50%.
Daniel Downing
Posted: 23 May 2018 12:18:17(UTC)
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Fair enough, I stand corrected. This is what MIFID was for. However, transaction costs will vary according to how active the manager is.
Perhaps this is why they are not stated on the factsheet and nothing to do with deception, which is perhaps what the EU are concerned about.
Tony Peterson
Posted: 23 May 2018 16:23:47(UTC)
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Well, I'd say that it is very public spirited of you to have so little faith in your own judgement that you would prefer to let others make investment decisions for you, and in the process, let them cream off a huge chunk of your potential gains for themselves.

Horses for courses, I guess.
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Guest on 25/05/2018(UTC)
Michael Grimes
Posted: 23 May 2018 16:48:03(UTC)
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So if you like me are with HL the saving on their charges for IT instead of UT's and Shares are then offset by the higher costs of IT management charges?

And there I was ready to reposition £300k cash in my portfolio into IT's having flogged underperforming UT's last week.

Now I am confused. Help anyone?
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john brace on 23/05/2018(UTC)
raybd
Posted: 23 May 2018 16:59:50(UTC)
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I joined this particular forum late, but see that it has already drifted off the question.
There are lots of additional questions a professional could/should ask. My answer is generic, not specific recommendations.
I am !00% in ITs (AJBell ISAs). One key objective is to spend less than 30min per day on investment. Nor do I have the skills to forensically analyse annual reports.
I monitor graphicaly with TrustNet charting (this copes with income reinvested and charges, so I look for the resulting performance and don't worry too much about charges per se I do worry about too high a discount: Lindsell Train, 3is, Syncona ... anything I don't understand..
I started with a benchmark of World Index (VEVE) but have steadily outperformed this and now have no ETFs. My benchmark is now, like an athlete, PBs.
My core is currently FRCS. I am 25% in smaller companies with a worldwide spread. I am attracted to FCS as a single holding but am holding off for the moment; JUSC also is on my watch-list. JESC and TRG are off the boil at the moment but need following.
I also have lesser "satellites" of emerging, tech, health/bio and Europe.
Good luck.
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foxy ron on 28/05/2018(UTC)
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