Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • aroominyork
    • By aroominyork 3rd Jul 17, 9:30 PM
    • 277Posts
    • 61Thanks
    aroominyork
    Views please on £280k investment portfolio
    • #1
    • 3rd Jul 17, 9:30 PM
    Views please on £280k investment portfolio 3rd Jul 17 at 9:30 PM
    I’d appreciate comments on this portfolio. It is for a £280k retirement fund which we will access in about 10 years. Alongside it I have a £100k workplace pension in a target date fund and £55k equity share in an investment property; we will soon have paid off our residential mortgage. At some stage, probably before retiring, I expect to receive a sizeable inheritance.

    If we could make this £280k fund increase an average 8%-10% pa we would be very happy, though of course we would want to reduce risk as we approach retirement and given how high markets are now we are concerned about taking too much risk to get 10%-12% in the first few years.

    We do not want over-exposure to the UK or US. We have just taken our funds away from an IFA and do not want to try to be too clever. Therefore our strategy is a) to have a default approach of investing in about three managed funds, b) adding equities in specific areas where we want to be heavier, and c) investing in short/strategic bonds to i) balance the extra equities, ii) keep our equity exposure below 65% as markets are high, and iii) have some low-risk funds to consider moving into non-UK equities if Sterling strengthens.

    1) The three managed funds are Royal London Sustainable World, Ballie Gifford Managed and Hawksmoor Vanburgh, with FEs of 83, 77 and 32 respectively. I think the first and third have historically provided the best returns relative to their FE, so I have allocated 20%, 10% and 21% respectively.

    2) We are drawn to Europe’s breadth of economies and choice. We are looking at Baring Europe Select (for SME), FP Crux European Special Situations and Man GLG Continental European Growth, allocated 4%, 4% and 7% respectively.

    3) We have put 4% next to First State Global Listed Infrastructure. I read this sector is a good defensive area but am willing to be convinced otherwise.

    4) Japan looks like it is going forward well so 7.5% on Baillie Gifford Japan Trust.

    5) We have a positive medium term view of India with a pro-business PM who looks set to be in power for a long time, so 7.5% on Jupiter India.

    6) 15% on bonds, through it’s hard to pick in this sector. I have gone for 7% Jupiter Strategic Bond, 4% Morgan Stanley Sterling Corporate Bond, 4% Rathbone Ethical Bond.

    The portfolio is about 63% in equities, though with Japan and India pushing 150 FE scores that may read closer to 70% in terms of risk. Geographically it is something like 29% UK, 27% Europe, 18% USA, 1% ANZ, 12% Japan, 9% India, 4% others.
Page 3
    • aroominyork
    • By aroominyork 8th Jul 17, 9:14 AM
    • 277 Posts
    • 61 Thanks
    aroominyork
    The Brewin Dolphin link is typical of an IFA’s process. The problem is that it gives you no time context – for newbies going through the process for the first time it does not frame the questions in whether your retirement (if that is what you are saving for) is ten years or forty years away. Giving the investor some basic information about the importance of the time factor and the cyclical nature of stock markets would affect how they respond. My last IFA offered six funds with none of them over c.75% equities because, they said, none of their clients wanted a higher risk. It's clear to me they were pushing people towards being risk averse as it made life easier for them (the IFAs) when markets fell. It’s like asking someone if they like wearing smart shoes without saying whether they are about to go to the beach or to a formal dinner.
    • aroominyork
    • By aroominyork 8th Jul 17, 9:21 AM
    • 277 Posts
    • 61 Thanks
    aroominyork
    Look at the underlying assets of these funds and the reasons for their relative returns will be apparent. It's often informative to look at the relative returns over longer times scales as well. What L&G funds are you looking at.....we need to make sure we are comparing like to like or we take account of different assets and amounts of risk.
    Originally posted by bostonerimus
    I'd have to go deeper than I have the ability/understanding to make sense of the underlying assets: that's why your keep-it-simple advice appears to me, and why I ask you the question . Re L&G I picked two off HL's Wealth 150: Global inflation linked bond index (C) and International index trust (C). Also, where can I see information going back over five years?
    Last edited by aroominyork; 08-07-2017 at 9:29 AM.
    • bigadaj
    • By bigadaj 8th Jul 17, 9:57 AM
    • 10,690 Posts
    • 6,981 Thanks
    bigadaj
    I'd have to go deeper than I have the ability/understanding to make sense of the underlying assets: that's why your keep-it-simple advice appears to me, and why I ask you the question . Re L&G I picked two off HL's Wealth 150: Global inflation linked bond index (C) and International index trust (C). Also, where can I see information going back over five years?
    Originally posted by aroominyork
    HLs lists have traditionally been a reflection of their commission rather than any outperformance of the selected fund.

    Vls is a uk centric family of funds.

    For individual funds you can go back ten years on trustnet and probably Morningstar.

    However we are still in extraordinary times, and have had near zero interest rates for approaching a decade, the next decade will certainly be different. The process of weaning people off free money will be painful for many.
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 11:51 AM
    • 55,859 Posts
    • 49,226 Thanks
    Thrugelmir
    However we are still in extraordinary times, and have had near zero interest rates for approaching a decade, the next decade will certainly be different. The process of weaning people off free money will be painful for many.
    Originally posted by bigadaj
    By coincidence it's the same length of time as the current bull market. 100 months to date. One wonders if complacency is creeping in. Many people know little differently. No experience of volatility. Watching ones investments moved up and down thousands in a day. Be some panic then.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • bigadaj
    • By bigadaj 8th Jul 17, 12:08 PM
    • 10,690 Posts
    • 6,981 Thanks
    bigadaj
    By coincidence it's the same length of time as the current bull market. 100 months to date. One wonders if complacency is creeping in. Many people know little differently. No experience of volatility. Watching ones investments moved up and down thousands in a day. Be some panic then.
    Originally posted by Thrugelmir
    Yes, I'd agree.

    However when interests rates rise the issues around equity markets will be minor, certainly for the majority of people, comoared to the effect on property. How many will afford doubling their mortgage payments, which would probably require vase rates to hit the heady heights of 2% maybe.
    • bostonerimus
    • By bostonerimus 8th Jul 17, 12:49 PM
    • 1,118 Posts
    • 628 Thanks
    bostonerimus
    I'd have to go deeper than I have the ability/understanding to make sense of the underlying assets: that's why your keep-it-simple advice appears to me, and why I ask you the question . Re L&G I picked two off HL's Wealth 150: Global inflation linked bond index (C) and International index trust (C). Also, where can I see information going back over five years?
    Originally posted by aroominyork
    Trustnet is ok. On there you can compare the components of each fund. the VLS funds have a UK bias and that might well be holding them back wrt L&G International Trust....so I would compare it to Vanguard Global Equity. If I was in the UK I'd probably start with a 2 fund portfolio of Vanguard Global Equity and Vanguard Global Bond.
    Misanthrope in search of similar for mutual loathing
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 1:09 PM
    • 55,859 Posts
    • 49,226 Thanks
    Thrugelmir
    However when interests rates rise the issues around equity markets will be minor, certainly for the majority of people, comoared to the effect on property.
    Originally posted by bigadaj
    Companies are taking debt on board. That debt eventually needs to be repaid or refinanced. 20% of all trading on the main US markets last year was companies repurchasing their own stock. Cheaper to borrow on the markets and buy back. Offsetting interest charges in the process against Corporation Tax. Than repatriate the cash from offshore tax havens and get hit for punitive taxes. As was the case with Tesco's. There's a huge amount of financial engineering going on. Not least to support dividend pay outs and employees stock options. Once the music finally stops then we'll see where the problems lie one suspects.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • aroominyork
    • By aroominyork 8th Jul 17, 1:49 PM
    • 277 Posts
    • 61 Thanks
    aroominyork
    If I was in the UK I'd probably start with a 2 fund portfolio of Vanguard Global Equity and Vanguard Global Bond.
    Originally posted by bostonerimus
    … since you are used to investing in the US. I am less confident in the US or my own country - which isn’t a great starting point! So I’ve arrived at a 70% split between two multi-asset funds (Vanguard 80/20 and Baillie Gifford Managed), 10% in Europe (either a tracker, or split between Baring Europe Select and Man GLG European Growth), 10% in Jupiter India (the left-fielder we are comfortable with) and 10% in strategic bonds (either Jupiter Strategic Bond or Morgan Stanley Sterling Corporate Bond).

    Our current investments (ex-IFA) are being liquidated as they move to our self-managed platform, so we will invest 40-45% now with the balance in 6 and 12 months.

    For each decision my sense-check is whether, if the fund falls badly, I would think it was an irrational decision for which I kick myself, or a rational decision that didn't work out.
    • bostonerimus
    • By bostonerimus 8th Jul 17, 4:15 PM
    • 1,118 Posts
    • 628 Thanks
    bostonerimus
    Ö since you are used to investing in the US. I am less confident in the US or my own country - which isnít a great starting point! So Iíve arrived at a 70% split between two multi-asset funds (Vanguard 80/20 and Baillie Gifford Managed), 10% in Europe (either a tracker, or split between Baring Europe Select and Man GLG European Growth), 10% in Jupiter India (the left-fielder we are comfortable with) and 10% in strategic bonds (either Jupiter Strategic Bond or Morgan Stanley Sterling Corporate Bond).

    Our current investments (ex-IFA) are being liquidated as they move to our self-managed platform, so we will invest 40-45% now with the balance in 6 and 12 months.

    For each decision my sense-check is whether, if the fund falls badly, I would think it was an irrational decision for which I kick myself, or a rational decision that didn't work out.
    Originally posted by aroominyork
    I've always been overweighted towards US equities, but that's common for US investors, and it's habit and inertia that mostly keeps me there. If I was in the UK I'd probably be 70% Global Equity Index and 30% Global Bond Index. i would not overweight any regions.
    Misanthrope in search of similar for mutual loathing
    • Audaxer
    • By Audaxer 8th Jul 17, 9:33 PM
    • 570 Posts
    • 248 Thanks
    Audaxer
    Ö since you are used to investing in the US. I am less confident in the US or my own country - which isnít a great starting point! So Iíve arrived at a 70% split between two multi-asset funds (Vanguard 80/20 and Baillie Gifford Managed), 10% in Europe (either a tracker, or split between Baring Europe Select and Man GLG European Growth), 10% in Jupiter India (the left-fielder we are comfortable with) and 10% in strategic bonds (either Jupiter Strategic Bond or Morgan Stanley Sterling Corporate Bond).

    Our current investments (ex-IFA) are being liquidated as they move to our self-managed platform, so we will invest 40-45% now with the balance in 6 and 12 months.

    For each decision my sense-check is whether, if the fund falls badly, I would think it was an irrational decision for which I kick myself, or a rational decision that didn't work out.
    Originally posted by aroominyork
    Good luck with your investments. I've seen threads where experienced investors have indicated that when investing in large six figure portfolios, you should diversify more widely into assets classes like property and commodities. I presume that is to possibly lessen volatility in the event of a large equity crash, but I'm not sure if it would give you any better returns in the long run.
    • Type 45
    • By Type 45 10th Jul 17, 12:04 PM
    • 57 Posts
    • 6 Thanks
    Type 45
    Why would an amateur think they can beat the markets?

    Either go with an IFA, or go with a fund such as Vanguard Life Strategy.


    Don't waste your time and money trying to do it yourself.
    • Eco Miser
    • By Eco Miser 10th Jul 17, 5:32 PM
    • 3,168 Posts
    • 2,929 Thanks
    Eco Miser
    Why would an amateur think they can beat the markets?
    Originally posted by Type 45
    a) because they don't know any better
    b) because they can -if they're lucky.

    Now, why would an professional think they can beat the markets?
    Eco Miser
    Saving money for well over half a century
    • Tcquins
    • By Tcquins 10th Jul 17, 8:25 PM
    • 12 Posts
    • 8 Thanks
    Tcquins
    I'll throw another food for thought into the Mix. Sterling.

    You can think about the performance of overseas shares all you like, but whether Sterling appreciates or depreciates against that currency the overseas shares in will often have the main effect on your portfolio performance.

    Think about using hedged funds to reduce volatility.
    • bostonerimus
    • By bostonerimus 10th Jul 17, 9:51 PM
    • 1,118 Posts
    • 628 Thanks
    bostonerimus
    Why would an amateur think they can beat the markets?

    Either go with an IFA, or go with a fund such as Vanguard Life Strategy.


    Don't waste your time and money trying to do it yourself.
    Originally posted by Type 45
    DIY is definitely not a waste of time.....but trying to beat the market is a waste of time for most people. So keep your investing simple and just used trackers. That way you don't need to pay an IFA or worry about beating the market.
    Misanthrope in search of similar for mutual loathing
    • bostonerimus
    • By bostonerimus 10th Jul 17, 9:56 PM
    • 1,118 Posts
    • 628 Thanks
    bostonerimus
    Good luck with your investments. I've seen threads where experienced investors have indicated that when investing in large six figure portfolios, you should diversify more widely into assets classes like property and commodities. I presume that is to possibly lessen volatility in the event of a large equity crash, but I'm not sure if it would give you any better returns in the long run.
    Originally posted by Audaxer
    Owning property is a nice portfolio diversifier and can also provide income from rent. Commodities are too volatile for me so I just stick to equities indexes, bond indexes and my a rental property. I have seven figures in 3 index tracker funds and don't worry about diversity.
    Misanthrope in search of similar for mutual loathing
    • aroominyork
    • By aroominyork 11th Jul 17, 3:33 PM
    • 277 Posts
    • 61 Thanks
    aroominyork
    One more question... looking at geographic spread of a fund, for example Vanguard80, the various countries/regions rarely add to 100 - here is is about 94%. Where is the rest, given that only a small amount is being held in cash?


    Think about using hedged funds to reduce volatility.
    Originally posted by Tcquins
    To combine this with bostonerimus' advice, are there good hedged trackers? Vanguard's list doesn't include any.
    Last edited by aroominyork; 11-07-2017 at 3:38 PM.
    • bowlhead99
    • By bowlhead99 11th Jul 17, 4:28 PM
    • 6,886 Posts
    • 12,393 Thanks
    bowlhead99
    One more question... looking at geographic spread of a fund, for example Vanguard80, the various countries/regions rarely add to 100 - here is is about 94%. Where is the rest, given that only a small amount is being held in cash?
    Originally posted by aroominyork
    I can't see that exact link as I can't log in as an HL customer...

    However, just browsing their site normally and searching for Lifestrategy 80 I can see that HL is only giving a top ten of holdings and country exposures. So, you are right - if you add them up you won't get to 100% coverage of the portfolio unless they only had 10 or fewer holdings or major country exposures.

    Just get the proper factsheet off the Vanguard website, or use a free fund data service like Trustnet.com or Morningstar. Certainly on the Vanguard site you can see all the (more than ten) Vanguard funds that it invests in and you can look up those funds and dig down further if you like.
    • bostonerimus
    • By bostonerimus 11th Jul 17, 5:55 PM
    • 1,118 Posts
    • 628 Thanks
    bostonerimus
    One more question... looking at geographic spread of a fund, for example Vanguard80, the various countries/regions rarely add to 100 - here is is about 94%. Where is the rest, given that only a small amount is being held in cash?


    To combine this with bostonerimus' advice, are there good hedged trackers? Vanguard's list doesn't include any.
    Originally posted by aroominyork
    Hedged trackers ?????

    There's no need to make this more complicated than it needs to be. There is an enormous fund universe out there an an infinite set of possible portfolios, the trick is to sensibly restrict your decision space so you are not paralyzed by choice.
    Misanthrope in search of similar for mutual loathing
    • badger09
    • By badger09 11th Jul 17, 6:22 PM
    • 5,396 Posts
    • 4,636 Thanks
    badger09
    One more question... looking at geographic spread of a fund, for example Vanguard80, the various countries/regions rarely add to 100 - here is is about 94%. Where is the rest, given that only a small amount is being held in cash?


    To combine this with bostonerimus' advice, are there good hedged trackers? Vanguard's list doesn't include any.
    Originally posted by aroominyork
    You can get information straight from the horse's mouth here

    https://www.vanguard.co.uk/uk/portal/investments/all-products

    Though some of it seems to be missing at the moment
    • aroominyork
    • By aroominyork 12th Jul 17, 12:21 AM
    • 277 Posts
    • 61 Thanks
    aroominyork
    Re geographic spread I am looking at the map of the world with the percentages shown for each country (USA, UK and Japan) or region and adding them. That it what totals under 100, sometimes significantly so.

    I think this comes down to 'other' investments, eg on Man GLG European Growth the fund analysis on this page shows 16.69% Other which is not reflected on this map. So what is Other and how do I take it into account when looking at geographic spread of a portfolio?
    Last edited by aroominyork; 13-07-2017 at 10:12 AM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

197Posts Today

1,586Users online

Martin's Twitter