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  • FIRST POST
    • cjm888
    • By cjm888 19th Apr 17, 2:24 PM
    • 22Posts
    • 17Thanks
    cjm888
    Review my Pension Portfolio
    • #1
    • 19th Apr 17, 2:24 PM
    Review my Pension Portfolio 19th Apr 17 at 2:24 PM
    Hi,

    Having read some good advise on these boards. It would be appreciated if you could take a look at my current pension portfolio and offer any advise ?.

    Having recently move a few pensions into my own SIPP.

    I am 39 and I would say I was on the 4 out of 5 risk rating.

    Approx figures for the funds:

    Blackrock US equity Index Tracker 20k
    Aviva Mixed 40-85 13k
    Aviva Emerging Markets Tracker 9k
    Woodford Income Focus (New fund) 20k
    Jupiter India Acc 15k
    Invesco Asian Fund - ACC ex Japan 10k
    Vanguard Lifestyle 100% Equity Acc 15k
    Cash 10k

    My portfolio choices are based on risk, geographical location and performance.
    I have no actual target in mind for my final pension pot at the moment.
Page 1
    • dunstonh
    • By dunstonh 19th Apr 17, 2:32 PM
    • 87,682 Posts
    • 52,912 Thanks
    dunstonh
    • #2
    • 19th Apr 17, 2:32 PM
    • #2
    • 19th Apr 17, 2:32 PM
    I am 39 and I would say I was on the 4 out of 5 risk rating.
    I never think a scale of 1-5 is enough. If 1 = cash and 5 = the highest risk possible using unit linked conventional funds then that only leaves 3 options in between.

    Give us some context about how much the value could go down before you get cold feet.

    Blackrock US equity Index Tracker 20k
    Aviva Mixed 40-85 13k
    Aviva Emerging Markets Tracker 9k
    Woodford Income Focus (New fund) 20k
    Jupiter India Acc 15k
    Invesco Asian Fund - ACC ex Japan 10k
    Vanguard Lifestyle 100% Equity Acc 15k
    Cash 10k

    My portfolio choices are based on risk, geographical location and performance.
    I have no actual target in mind for my final pension pot at the moment.
    Im struggling to see any structure to that. It is a mixture of single sector and multi-asset funds.
    What reasons do you have for mixing the single sector funds with the multi-asset?
    What sort of volatility risk level does that come out at?
    Why so much cash when you appear to be willing to take increased risk?

    To my eye, the selection seems to be a bit random and possibly a hint of fashion investing.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • cjm888
    • By cjm888 19th Apr 17, 2:57 PM
    • 22 Posts
    • 17 Thanks
    cjm888
    • #3
    • 19th Apr 17, 2:57 PM
    • #3
    • 19th Apr 17, 2:57 PM
    Thank you for your reply.

    I would say if I was 25% down I would seriously get cold feet but with the spread in different geographical locations that should reduce the risk.

    Before I was mainly in single sector funds but now moving into multi-asset funds due to risk and management charges.

    I have only had the SIPP for two months and the cash will be for share purchases - mainly recovery plays.

    Should I be looking at Investment Trusts as well for a slow steady guaranteed return every year ?
    • kidmugsy
    • By kidmugsy 19th Apr 17, 3:36 PM
    • 9,263 Posts
    • 6,077 Thanks
    kidmugsy
    • #4
    • 19th Apr 17, 3:36 PM
    • #4
    • 19th Apr 17, 3:36 PM
    Should I be looking at Investment Trusts as well for a slow steady guaranteed return every year ?
    Originally posted by cjm888
    There are no guarantees. You have to grasp that.
    • Linton
    • By Linton 19th Apr 17, 4:03 PM
    • 7,645 Posts
    • 7,417 Thanks
    Linton
    • #5
    • 19th Apr 17, 4:03 PM
    • #5
    • 19th Apr 17, 4:03 PM
    You wont get a slow steady return with anything except an investment that is designed to provide just that - eg a With Profits Fund, one of the Wealth Retention funds or an Absolute Return fund if you can find one that works. However such investments overall will in the long term produce lower growth than somethng that rides the waves.

    You should make sure that you cover all regions, industries etc. Your portfolio has 3 funds in the general Emerging Market area (Asia Pac and EM have a lot of commonality) - the Aviva tracker, Jupiter India and Invesco Asia making about 1/3 of your portfolio. That is seriously and in my view recklessly high. On the other hand you have perhaps less than 5% in Europe and less than that in Japan - together perhaps about half of your investment in India

    You seem to have high %s in focused funds and lower %s in general funds. This is bizarre, you should be investing the other way round. For example you have about 13% in the Aviva bond/equity mixed fund. Presumably because you believe that its ratio of bonds/equity meets your needs. Then you mess up the fund managers efforts to keep the fund within the desired ratio limits by investing the rest of your money in equity funds. If you want bonds in a multi-fund portfolio, buy a bond fund. If you want the fund manager to do the work, buy a multi asset fund and nothing much else.
    • dunstonh
    • By dunstonh 19th Apr 17, 4:18 PM
    • 87,682 Posts
    • 52,912 Thanks
    dunstonh
    • #6
    • 19th Apr 17, 4:18 PM
    • #6
    • 19th Apr 17, 4:18 PM
    I would say if I was 25% down I would seriously get cold feet but with the spread in different geographical locations that should reduce the risk.
    That means you appear to be investing above your risk profile currently. Also, that would not put you a 3/5. That level of loss is more 5/10

    Diversification reduces risks of failure and but if you include areas of higher risk investments, then that increases the risks. You have picked some very high risk areas. In small moderation that is fine but your weightings look higher than your tolerance.

    Should I be looking at Investment Trusts as well for a slow steady guaranteed return every year ?
    Investment trusts have higher risks than their equivalent UT/OEIC. Those risks can equate into higher potential but require a greater knowledge and understanding and you will not get slow or steady guaranteed returns.

    Your lack of structure is likely to result in lower returns than a multi-asset fund that has structure.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • bigadaj
    • By bigadaj 19th Apr 17, 7:58 PM
    • 8,939 Posts
    • 5,676 Thanks
    bigadaj
    • #7
    • 19th Apr 17, 7:58 PM
    • #7
    • 19th Apr 17, 7:58 PM
    Hi,

    Having read some good advise on these boards. It would be appreciated if you could take a look at my current pension portfolio and offer any advise ?.

    Having recently move a few pensions into my own SIPP.

    I am 39 and I would say I was on the 4 out of 5 risk rating.

    Approx figures for the funds:

    Blackrock US equity Index Tracker 20k
    Aviva Mixed 40-85 13k
    Aviva Emerging Markets Tracker 9k
    Woodford Income Focus (New fund) 20k
    Jupiter India Acc 15k
    Invesco Asian Fund - ACC ex Japan 10k
    Vanguard Lifestyle 100% Equity Acc 15k
    Cash 10k

    My portfolio choices are based on risk, geographical location and performance.
    I have no actual target in mind for my final pension pot at the moment.
    Originally posted by cjm888
    First thing I'd do is plug that into a portfolio on trustnet or morningstar and see how the allocations are split, geographically, by sector, asset type, risk or volatility etc

    That should at least supply some clarity and a start for a reasoned assessment.
    • AnotherJoe
    • By AnotherJoe 20th Apr 17, 10:49 AM
    • 6,295 Posts
    • 6,661 Thanks
    AnotherJoe
    • #8
    • 20th Apr 17, 10:49 AM
    • #8
    • 20th Apr 17, 10:49 AM
    Hi,

    Having read some good advise on these boards. It would be appreciated if you could take a look at my current pension portfolio and offer any advise ?.

    Having recently move a few pensions into my own SIPP.

    I am 39 and I would say I was on the 4 out of 5 risk rating.

    Approx figures for the funds:

    Blackrock US equity Index Tracker 20k
    Aviva Mixed 40-85 13k
    Aviva Emerging Markets Tracker 9k
    Woodford Income Focus (New fund) 20k
    Jupiter India Acc 15k
    Invesco Asian Fund - ACC ex Japan 10k
    Vanguard Lifestyle 100% Equity Acc 15k
    Cash 10k

    My portfolio choices are based on risk, geographical location and performance.
    I have no actual target in mind for my final pension pot at the moment.
    Originally posted by cjm888
    Based on your portfolio that means you are actively looking for very high risk idiosyncratic performance and arent bothered if the pot ends up being very low?

    MY sugegstion is; Collapse the Blackrock, Mixed and VLS100 into into VLS80 (since teh mixed contains bonds and VLS100 doesnt), move the india and the asia into the Emerging as they will massively overap anyway. Though I'd probably put halfof those in VLS80 and half in emerging.

    To leave, if my maths is right

    Aviva Emerging Markets Tracker 22k
    Woodford Income Focus (New fund) 20k
    Vanguard Lifestyle 80% Equity Acc 60k
    Cash 10k - that you will do something with shortly ?

    I also dont understand why you have the income focus fund, that doesn't work for me as a long term growth fund.

    Also, you say you'd be worried if it dropped 25% so on that basis, if that overrides everything else, since EM could easily do that, I might suggest

    Aviva Emerging Markets Tracker 10k
    Vanguard Lifestyle 60% Equity Acc 92k
    Cash 10k - that you will do something with shortly ?

    (basically your concern about a 25% drop is massively in contradiction with so much in EM, different geographies wont help much, if one goes they all tend to go) And ive gone for VLS60 instead of 80, taking the 25% concern into account. But if you have the nerve, over 25+ years IMO VLS80 would be a better choice.
    Last edited by AnotherJoe; 20-04-2017 at 11:01 AM.
    • cjm888
    • By cjm888 20th Apr 17, 1:14 PM
    • 22 Posts
    • 17 Thanks
    cjm888
    • #9
    • 20th Apr 17, 1:14 PM
    • #9
    • 20th Apr 17, 1:14 PM
    Thanks all for your feedback. Very useful.

    I had 5 different pension providers that I am moving into one SIPP and that is why the portfolio is unbalanced as every time I moved a chunk in I looked at the best performing funds on an individual basis rather than at my portfolio as a whole...

    I agree I am too much in EM.

    Although it seems too simple I think 80% into the VLS 80/20 and then 20% into an EM tracker fund and sit back for 20 years...
    • dunstonh
    • By dunstonh 20th Apr 17, 2:03 PM
    • 87,682 Posts
    • 52,912 Thanks
    dunstonh
    every time I moved a chunk in I looked at the best performing funds on an individual basis rather than at my portfolio as a whole...
    At least you are honest about it. Hopefully you will change that going forward.


    Although it seems too simple I think 80% into the VLS 80/20 and then 20% into an EM tracker fund and sit back for 20 years...
    So, when you get your statement and the fund value is half the value it was on the previous statement, how are you going to react? You said you felt 25% loss was your comfort zone. The spread you are proposing would have suffered two losses in excess of 50% in the last 20 years.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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