Portfolio re-balance

jd79 · 17 November 2006 at 1:03PM

Edinvestor

*BTW query to the OP, perhaps you could outline the thinking underlining your fund choices? Why did you pick each particular fund?*[/QUOTE]

Hi Ed

I basically looked at my funds, all of which I have had for a very long time. I decided to remove the ones that had not been performing well and hold on to the remaining funds. I looked on various sites for research purposes including Citywire, much like your suggestion on #4 of this thread. I picked out good performers in the various sectors. I then tried to get a good spread and diversification. I perhaps did not go far enough. I want to get a well balance portfolio of funds in the first instance for around 100k and I will then and go on to the second , for a similar amount, over the the next couple of years or so. As previously stated, this could be by way of an HYP, although nothing is carved in stone.

Many thanks.

EdInvestor · 17 November 2006 at 1:33PM

cheerfulcat wrote:

Hi, Ed,

The immediate effect on an HYP was to cut the income by 10% so in your illustration instead of £4,500 p/a the dividend income would be £5,000. Of course in a pension fund, where the dividends are re-invested, the compounded effect would be far greater.

Indeed, 500 quid doesn't look like much against an overall gain of 25,000 pounds, just like an AMC of 1.5% doesn't look like much on a fund or pension.But compounded over 25 years it adds up to a lot.

Brown's boys claim however that the accompanying cut in ACT should have mitigated the effect quite substantially.

Certainly it seems noticeable in my portfolio that many companies are throwing money at share buybacks, thus boosting the price, and also raising their divis ( BT for instance recently put its up by 19%, and a 5% a year rise is fairly routine I find). There are also a lot of special dividends these days one notices.

So have you noticed a real reduction in your HYP's performance as a result of the move? I have to admit I have been surprised at the very strong capital performance in mine, a very welcome, albeit unexpected extra, so I do wonder if there has been a compensatory factor from this side. I haven;t held the portfolio long enough to judge.

dunstonh · 17 November 2006 at 2:06PM

I haven;t held the portfolio long enough to judge.

How long have you had it?

scouser_in_exile · 17 November 2006 at 3:23PM

Post Edited

jd79 · 17 November 2006 at 4:04PM

scouser_in_exile wrote:

Well, the original asset allocation I posted was slightly skewed by the fact that I insisted for a minimum of 10% exposure to property and max exposure of 35% to UK equities. Only reason I applied this was that it's been a common theme for certain cases recently.

ISA/PEP asset allocation for a risk 9 would be:

UK Fixed Interest 6%
UK Equity 42%
North American 13%
European 13%
Japanese 8%
Far East Ex Japan 5%
Emerging Market Equity 5%
Global Specialist 8%

Hi Sie

I thank you for coming back in on this thread. I must admit that at times I am becoming slightly bemused. This comment is not directed at you.As
the OP I would like the thread to stay focused on my original enquiry in relation to a fund portfolio as per your ISA/PEP aset allocation shown above.

I am getting the feeling of being hi-jacked because I now see discussions on the relative merits of Watson Wyatt/HYP and the like. These matters obviously are worthy of discussion and I would suggest that a separate thread would be in order.

I have held shares successfully for many years and I am now endeavouring to diversify a little. I am perhaps not the quickest of learners and find some of the tangents, by others, distracting to say the least.

I do hope none of this appears rude as this is not my intention, all I ask is for reciprocal courtesy.

Once again I thank you, you have been very kind.

Portfolio re-balance

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