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  • FIRST POST
    • Olivier811
    • By Olivier811 31st May 17, 12:44 AM
    • 21Posts
    • 1Thanks
    Olivier811
    Critique my Portfolio
    • #1
    • 31st May 17, 12:44 AM
    Critique my Portfolio 31st May 17 at 12:44 AM
    Hi all,
    I have had the below portfolio for a while but it feels quite muddled up. I inherited everything apart from the Lifestrategy and know very little about the other funds. Any feedback would be really appreciated. I am looking for moderately high risk, low cost exposure to a wide range of markets - hence the Lifestrategy 80.

    Company Valuation
    VANGUARD INV UK LT LIFESTRATEGY 80 PERC EQUITY £87,916.23
    SCOT MORT INV TST ORD GBP0.05 £19,940.00
    SECS TST SCOTLAND RED ORD GBP0.01 £14,598.50
    HENDERSON EURO FOC ORD GBP0.50 £11,837.53
    BRUNNER INV TR ORD GBP0.25 £11,216.00
    STD LIFE UK SMALL ORD GBP0.25 £10,593.00
    POLAR CAP TECH TST GBP0.25 £10,352.50
    WORLDWIDE HLTHCARE ORD GBP0.25 £9,480.00
    RIT CAP PARTNERS ORD GBP1 £7,905.00
    FIDELITY SPEC VALU ORD GBP0.05 £7,267.50
    ABERDEEN NEW DAWN ORD GBP0.05 £6,497.38
    F&C COMM PROP TST ORD GBP0.01 £6,351.10

    Cheers
Page 1
    • bigadaj
    • By bigadaj 31st May 17, 5:54 AM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    • #2
    • 31st May 17, 5:54 AM
    • #2
    • 31st May 17, 5:54 AM
    We can critique but I suppose from what you've said it isn't really your portfolio.

    It's half of a vanguard multi asset fund and a whole bunch of someone else's investment trusts that you've acquired.

    First thing to say is that if you had the near £100k in the non vanguard investments would you go out and buy that selection of funds, I presume the answer is no. However depending on your platform it could costs you money to buy and sell these funds so probably worth some thought on which you might want to see, before cashing them all in.

    You'd generally look at the portfolio as a whole, so set up a dummy portfolio on trustnet or Morningstar and see what the allocations look like in terms of asset class, geography etc

    You could sell all of the inherited portfolio and place it into your vanguard fund, or sell and buy some complementary funds, maybe smaller companies, property etc
    • Olivier811
    • By Olivier811 2nd Jun 17, 2:14 AM
    • 21 Posts
    • 1 Thanks
    Olivier811
    • #3
    • 2nd Jun 17, 2:14 AM
    • #3
    • 2nd Jun 17, 2:14 AM
    I am with iWeb so the cost of selling all the other investments and putting it into more VLS wouldn't be huge (around £60).

    That is what I am considering but I am worried that it is too much risk having it all in one company. I know VLS is diversified but incase Vanguard makes a mistake or similar.

    What I was wondering is if any of the funds already there complement VLS well or do you have any recommendation for funds that do?
    Last edited by Olivier811; 02-06-2017 at 2:14 AM. Reason: typo
    • bostonerimus
    • By bostonerimus 2nd Jun 17, 4:17 AM
    • 1,107 Posts
    • 621 Thanks
    bostonerimus
    • #4
    • 2nd Jun 17, 4:17 AM
    • #4
    • 2nd Jun 17, 4:17 AM
    VLS80 owns index tracker funds in certain amounts....there's no active trading so the only mistake possible is the original selection of the assets and you seem ok with that.

    Vanguard itself is owned by the funds, which are owned by the shareholders.......its a mutual company and not publicly traded so the only way you'll lose money is because of the ups and downs of the markets.
    Misanthrope in search of similar for mutual loathing
    • Olivier811
    • By Olivier811 2nd Jun 17, 8:16 PM
    • 21 Posts
    • 1 Thanks
    Olivier811
    • #5
    • 2nd Jun 17, 8:16 PM
    • #5
    • 2nd Jun 17, 8:16 PM
    Thanks, and would you say that around 200k in just VLS 80 is ok?
    • bigadaj
    • By bigadaj 3rd Jun 17, 8:39 AM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    • #6
    • 3rd Jun 17, 8:39 AM
    • #6
    • 3rd Jun 17, 8:39 AM
    Thanks, and would you say that around 200k in just VLS 80 is ok?
    Originally posted by Olivier811
    It's ok but probably not ideal.

    The first issue is that the fscs limit on investments is only £50k which typically applies to the fund house, vanguard in this case. The underlying assets like the company shares are he,d separately and vanguard are the second biggest asset manager in the world, so it is incredibly unlikely tans limited to issues like fraud, but it's a consideration.

    Similar funds are run by other big asset managers like fidelity, legal and general, black rock etc, so you could invest into one of those at your suitable risk level.

    Also once you start getting into solid six figures then considering areas that vls doesn't cover can be worthwhile, areas like smaller companies, property etc

    I would t rush into anything, have a look at the investment trusts you've inherited and get some understanding of them as there are some good funds there.
    • Audaxer
    • By Audaxer 3rd Jun 17, 9:01 AM
    • 559 Posts
    • 244 Thanks
    Audaxer
    • #7
    • 3rd Jun 17, 9:01 AM
    • #7
    • 3rd Jun 17, 9:01 AM
    Similar funds are run by other big asset managers like fidelity, legal and general, black rock etc, so you could invest into one of those at your suitable risk level.
    Originally posted by bigadaj
    Another similar type of multi asset passive fund is the HSBC Global Strategy portfolio with an OCF of only 0.19%.
    • Alice Holt
    • By Alice Holt 3rd Jun 17, 4:31 PM
    • 1,536 Posts
    • 1,645 Thanks
    Alice Holt
    • #8
    • 3rd Jun 17, 4:31 PM
    • #8
    • 3rd Jun 17, 4:31 PM
    I would t rush into anything, have a look at the investment trusts you've inherited and get some understanding of them as there are some good funds there.
    Originally posted by bigadaj
    +1

    Bigadj suggestion of using trustnet to set up a dummy portfolio and see what the allocations look like in terms of asset class, geography, management costs, dividend policy, past performance, etc is an excellent one.

    I'd suggest you carefully consider your own investment priorities, and assess the portfolio you have inherited.
    • mike88
    • By mike88 4th Jun 17, 1:04 PM
    • 549 Posts
    • 415 Thanks
    mike88
    • #9
    • 4th Jun 17, 1:04 PM
    • #9
    • 4th Jun 17, 1:04 PM
    A high risk portfolio is fine if you are young (in certain circumstances) or have everything you want in terms of housing, good job, pension and cash. If none of these apply a more conservative portfolio is appropriate. However if you are merely seeking "risk" growth for no particular reason and have a reasonable amount of available cash then risk is fine as long as you are prepared to accept losses. Stockmarkets are performing well at present but historically, after a period of growth, there are falls - sometimes significant.

    Generally high risk can mean either high reward or a high risk of losses. Is now the right time to invest in higher risk Trusts? Uncertainties lie ahead in terms of BREXIT and the Election with possible consequences for inflation and currency so going for risky growth might not be the best bet for everyone at this time although I confess I have not followed my own advice but am able to absorb heavy losses.

    At the end of the day your attitude to risk and future plans are issues that need to be taken into account when assessing a portfolio.
    Take my advice at your peril.
    • Audaxer
    • By Audaxer 5th Jun 17, 10:21 PM
    • 559 Posts
    • 244 Thanks
    Audaxer
    A high risk portfolio is fine if you are young (in certain circumstances) or have everything you want in terms of housing, good job, pension and cash. If none of these apply a more conservative portfolio is appropriate. However if you are merely seeking "risk" growth for no particular reason and have a reasonable amount of available cash then risk is fine as long as you are prepared to accept losses. Stockmarkets are performing well at present but historically, after a period of growth, there are falls - sometimes significant.

    Generally high risk can mean either high reward or a high risk of losses. Is now the right time to invest in higher risk Trusts? Uncertainties lie ahead in terms of BREXIT and the Election with possible consequences for inflation and currency so going for risky growth might not be the best bet for everyone at this time although I confess I have not followed my own advice but am able to absorb heavy losses.

    At the end of the day your attitude to risk and future plans are issues that need to be taken into account when assessing a portfolio.
    Originally posted by mike88
    I would have thought higher risk doesn't necessarily mean higher 'losses' unless you sell - just higher volatility.

    He has inherited the Trusts and is considering selling them and putting in all in a VLS80, which would seem to be quite a high risk as well.
    • Thrugelmir
    • By Thrugelmir 5th Jun 17, 10:31 PM
    • 55,824 Posts
    • 49,191 Thanks
    Thrugelmir
    I would have thought higher risk doesn't necessarily mean higher 'losses' unless you sell - just higher volatility.
    Originally posted by Audaxer
    A poorly performing investment is unlikely to be dragged higher in price just because the market is moving upwards.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • MPN
    • By MPN 6th Jun 17, 4:35 PM
    • 236 Posts
    • 79 Thanks
    MPN
    Generally high risk can mean either high reward or a high risk of losses. Is now the right time to invest in higher risk Trusts?.
    Originally posted by mike88
    I think the OP has inherited some good Trusts such as Henderson European Focus & Scottish Mortgage and although some trusts are higher risk they can equally give higher rewards as you mentioned. If I had inherited these trusts I would certainly investigate them further before selling to buy more VLS80!

    To my mind VLS80 also carries quite a high risk maybe not as much as trusts but surely there is no reason to sell all of them and put all your eggs in one basket?
    • Linton
    • By Linton 6th Jun 17, 5:43 PM
    • 8,461 Posts
    • 8,384 Thanks
    Linton
    When I first saw you portfolio I thought it was a bit of a mish mash with no obvious structure or strategy.

    However, putting into Morningstar Xray I find it is well diversified across sectors and geographies with a rather higher % small/midcap equity than VLS80's equity. It consistently outperforms VLS80 with a 5 year average return of 17.4% against VLS80's 13% and VLS100's 15.9%.
    • MonroeM
    • By MonroeM 7th Jun 17, 11:26 AM
    • 114 Posts
    • 32 Thanks
    MonroeM
    I tend to agree with MPN's comments above that the OP should at least research and assess the trusts that he has inherited before transferring all his portfolio into VLS80.

    Whether it would be a lot more high risk to retain these trusts as opposed to VLS80 I'm not informed enough to know but do the research and then make your decision. There are of course a lot of other possibilities but all these will also require further research.
    • Sally57
    • By Sally57 8th Jun 17, 11:01 AM
    • 87 Posts
    • 18 Thanks
    Sally57
    When I first saw you portfolio I thought it was a bit of a mish mash with no obvious structure or strategy.

    However, putting into Morningstar Xray I find it is well diversified across sectors and geographies with a rather higher % small/midcap equity than VLS80's equity. It consistently outperforms VLS80 with a 5 year average return of 17.4% against VLS80's 13% and VLS100's 15.9%.
    Originally posted by Linton
    Its interesting that the Morningstar Xray report confirms the OP's portfolio of IT's outperforms VLS100/80. I would be very tempted to keep the IT's until I fully researched the individual factsheets etc. Surely, it would be a shame to sell them all just because you didn't want to do the research?
    • Audaxer
    • By Audaxer 8th Jun 17, 1:33 PM
    • 559 Posts
    • 244 Thanks
    Audaxer
    Its interesting that the Morningstar Xray report confirms the OP's portfolio of IT's outperforms VLS100/80. I would be very tempted to keep the IT's until I fully researched the individual factsheets etc. Surely, it would be a shame to sell them all just because you didn't want to do the research?
    Originally posted by Sally57
    I would agree. The OP thought the portfolio he had inherited seemed a bit muddled, but as Linton found out through the Morningstar Xray, it seems to be a well diversified portfolio with a good past performance, which indicates the previous owner of the portfolio knew what they were doing. Accordingly I would be tempted to keep the portfolio rather than put it all in a VLS80.

    However I note that the OP said he was after moderately high risk, so not sure whether or not the IT portfolio is all equities and therefore higher risk than the VLS80? If it is he could presumably just de-risk it a bit, rather than selling everything and putting it all into the VLS80?
    • Sue58
    • By Sue58 9th Jun 17, 3:19 PM
    • 83 Posts
    • 12 Thanks
    Sue58
    I think the OP has inherited some good Trusts such as Henderson European Focus & Scottish Mortgage and although some trusts are higher risk they can equally give higher rewards as you mentioned. If I had inherited these trusts I would certainly investigate them further before selling to buy more VLS80!

    To my mind VLS80 also carries quite a high risk maybe not as much as trusts but surely there is no reason to sell all of them and put all your eggs in one basket?
    Originally posted by MPN
    I've just been doing some research on Trustnet and Scottish Mortgage IT and the Henderson European Focus IT have both done really well over the past 10 years but SM has been outstanding!
    • bigadaj
    • By bigadaj 9th Jun 17, 4:12 PM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    I've just been doing some research on Trustnet and Scottish Mortgage IT and the Henderson European Focus IT have both done really well over the past 10 years but SM has been outstanding!
    Originally posted by Sue58
    Past performance is no guarantee of future returns etc etc
    • Sue58
    • By Sue58 9th Jun 17, 5:34 PM
    • 83 Posts
    • 12 Thanks
    Sue58
    Past performance is no guarantee of future returns etc etc
    Originally posted by bigadaj
    I totally agree but you have to get some data from somewhere and SMT have been through the downturns of 2008/9 and 2011 and still produced excellent results overall.

    Surely, you have to compare funds/IT's in their own sectors over say a 10 year period to ascertain how they have performed especially in a downturn and how they recovered?
    • bigadaj
    • By bigadaj 9th Jun 17, 6:49 PM
    • 10,671 Posts
    • 6,970 Thanks
    bigadaj
    I totally agree but you have to get some data from somewhere and SMT have been through the downturns of 2008/9 and 2011 and still produced excellent results overall.

    Surely, you have to compare funds/IT's in their own sectors over say a 10 year period to ascertain how they have performed especially in a downturn and how they recovered?
    Originally posted by Sue58
    Why ten years, why not twenty five or forty years?

    How is the volatility of the fund over the defined period?

    Has the manager been there for a long time, has he or she recently moved?

    Just things to consider.
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