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  • FIRST POST
    • aroominyork
    • By aroominyork 3rd Jul 17, 9:30 PM
    • 300Posts
    • 72Thanks
    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 4
    • The neverists
    • By The neverists 29th Nov 17, 3:10 PM
    • 2 Posts
    • 0 Thanks
    The neverists
    I know its a volatile fund but for Japan maybe look at Legg Mason Japan, it has blown the doors off for long periods, if you can stand the volatility.
    • BananaRepublic
    • By BananaRepublic 29th Nov 17, 3:54 PM
    • 936 Posts
    • 678 Thanks
    BananaRepublic
    Re my expectations, 8% would be about half of how these funds have performed over the last five years.
    Originally posted by aroominyork
    We have had a long bull run since the last crash. So it is quite possible that funds would achieve significantly less growth over the next five years.
    • aroominyork
    • By aroominyork 29th Nov 17, 4:03 PM
    • 300 Posts
    • 72 Thanks
    aroominyork
    Banana, I wrote that back in July when I was just starting out. A lot of water and many threads have flowed under the bridge since then. Not sure why neverists resuscitated this thread but of the funds I mentioned in my first post I now only hold two, one of which is Baillie Gifford Japan Trust, and while the Legg Mason fund looks great fun I think I'll stay put.
    • BananaRepublic
    • By BananaRepublic 29th Nov 17, 4:15 PM
    • 936 Posts
    • 678 Thanks
    BananaRepublic
    Is there a template for how to do a robust stress test? How do you set scenarios?

    I have been looking at managed funds' holdings and seen fundamental differences. Looking at the top ten holdings of the three funds I mentioned above, Royal London picks individual stocks; Ballie Gifford uses its in-house funds and some individual stock picking; Hawksmoor uses other companiesí funds (Jupiter, Henderson etc.). Interesting.
    Originally posted by aroominyork
    A crude method is to look at the returns from a given index over a range of 5 year periods, such as 2000-2005, 2001-2006 and so on, but use as large a date range as you can. You could just look at the value of the index, but that ignores dividends. However, it would at least give you a measure of the expected variation. This of course assumes a fund that tracks the index.
    • BananaRepublic
    • By BananaRepublic 29th Nov 17, 4:17 PM
    • 936 Posts
    • 678 Thanks
    BananaRepublic
    Banana, I wrote that back in July when I was just starting out. A lot of water and many threads have flowed under the bridge since then. Not sure why neverists resuscitated this thread but of the funds I mentioned in my first post I now only hold two, one of which is Baillie Gifford Japan Trust, and while the Legg Mason fund looks great fun I think I'll stay put.
    Originally posted by aroominyork
    Okay Room, point taken. However, to assume that recent past gains in the Japanese market will continue is optimistic, unless it forms a modest proportion of your portfolio.
    • cynicaldoc
    • By cynicaldoc 29th Nov 17, 4:21 PM
    • 26 Posts
    • 10 Thanks
    cynicaldoc
    Very interesting reading for a newbie. I have kept my portfolio very simple, albeit active after a lot of reading herein and elsewhere.

    2/3 in Lindsell Train Global Equity and 1/3 in SMT. I realise there are fees that are higher than Vanguard (which I did hold initially) but for me, at the moment, those fees are relatively small as my portfolio is currently relatively small.
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