Fund spread Sector suggestions

peterg1965

I know there is anothing hard and fast here, but what would constitute a medium risk (investing over 10 years) spread of investments over the various investment sectors and with what weighting in each in order to achieve optimal growth?

I would be looking at saving monthly into 6 or 7 ISA funds, with about £600 each month to invest.

My initial stab would be:

20% UK equities
15% Specialist
15% Global Growth
10% Europe (excl UK)
10% US
15% Corporate Bonds
10% Property (UK)
5% Asia Pacific

Any comments appreciated.

dunstonh

The problem you are going to have is with some fund supermarkets the minimum per fund is £50. There are some that will go much lower but I dont know any on the DIY front (maybe another person does). So, straight away your minimum is going to be just over 8% in that sector. £600pm is a good contribution and 8% isnt going to be difficult for you to manage around

I have risk 6 out 10 sector allocation for 10 years as :

11% Europe
7% Far East (ex Jap)
4% Emerg Mks
7% Specialist
4% Japan
11% N America
5% Property
18% UK Equity
33% Fixed Interest.

peterg1965

Thanks Dunstonh. I already have £3500 (form a lump sum) invested about 18 months ago. This is invested heavily in Specialist funds and about 30% in China, so I will use these current funds as as part of the process of allocating the monthly investments to future funds.

I note that you opt for 33 fixed interest, what sort of funds are these? Are they Gilts and Bonds? and can they be bought via HL?

dunstonh

I note that you opt for 33 fixed interest, what sort of funds are these? Are they Gilts and Bonds? and can they be bought via HL?

Fixed interest sector covers all your types of fixed interest areas. High yield bonds, gilts, corp bonds etc. HL will have the range you expect from a fund supermarket.

I suspect that your definition of medium risk is different to mine. I would place your sector spread at high risk (around 8 out of 10). You are heavier in the high risk areas although the monthly contribution lowers the risk against that somewhat for a few years. However, as you get closer to year 5 (out of 10) the risk will start to increase quickly and significantly (due to time left)

jon3001

dunstonh wrote: »

The problem you are going to have is with some fund supermarkets the minimum per fund is £50. There are some that will go much lower but I dont know any on the DIY front (maybe another person does). So, straight away your minimum is going to be just over 8% in that sector.

You can do it albeit indirectly using the switching service (HL have no minimum). I target a fairly fine-grained sector allocation which includes international small company stocks and commodity stocks.

Say I'm investing £600/month into an ISA and I want £25 to go into US Blend (e.g. L&G US Index Trust) and £25 into US Small Company Stocks (e.g. Schroder US Smaller Companies). I'll have the regular investment actually put £50 into L&G US Index Trust. Once the units are bought I'll switch out £25's worth into the Schroder US Smaller Companies.

So basically you bunch up related investments (e.g. US Stocks) and then switch out a portion.

If the investments aren't related then invest first in something like a Gilt fund and then switch out to where you want to invest.