Any thoughts on my portfolio?

lemon26

Hi again, as a newbie to investing I've been playing with my portfolio and this is what I've got:

Artemis Strategic Assets R Acc 17.08%
Cazenove Multi-Manager Global (ex-UK) Acc 10.43%
HSBC Pacific Index Acc 5.52%
Invesco Perp Corporate Bond Inc 8.7%
Invesco Perp High Income Acc 18.3%
JPM Natural Resources A Acc 5.37%
Jupiter Financial Opps Inc 7.62%
Jupiter India Fund Acc 5.39%
Jupiter Int'l Financials 7.63%
Threadneedle UK Property Trust Acc 13.96%

I have noticed that the High Income and Strategic Assets funds overlap, would it be better to sell one and switch to one? I'm up 5.5% since purchase on the high income account but down 2% on the strategic assets. Is there any fund in my portfolio I should be putting my profits into to best protect them? I'm also down 12% on the Financial Opportunities since purchase but I plan to stick with thisone and at least aim to make good losses.

Would I be better off having a larger sum in the Cazenove fund as it's a fund-of-funds and having less in the property fund?

How would my portfolio be classed - I'm trying to be aggressive. Thanks in advance for any opinions and advice and here's to a successful 2010! Thanks, L

ses6jwg

Is there a tool people are using to work out the percentages in their portfolio?

lemon26

I use fidelity as that's who my ISA is with but I've also been pointed in the direction of morningstar.co.uk by people on this forum - seems to be a very handy site! L

QuietDragon

lemon26 wrote: »

Hi again, as a newbie to investing I've been playing with my portfolio and this is what I've got:

Artemis Strategic Assets R Acc 17.08%
Cazenove Multi-Manager Global (ex-UK) Acc 10.43%
HSBC Pacific Index Acc 5.52%
Invesco Perp Corporate Bond Inc 8.7%
Invesco Perp High Income Acc 18.3%
JPM Natural Resources A Acc 5.37%
Jupiter Financial Opps Inc 7.62%
Jupiter India Fund Acc 5.39%
Jupiter Int'l Financials 7.63%
Threadneedle UK Property Trust Acc 13.96%

snip

How would my portfolio be classed - I'm trying to be aggressive. Thanks in advance for any opinions and advice and here's to a successful 2010! Thanks, L

Hi Lemon,

Here's my 2p worth (or perhaps worthless) input.

Artemis Strategic Assets R Acc (Sterling Aggressive Balanced)
This is a fund type I wouldn't touch - one that mingles equities with bonds. I either want an equities fund or a bonds fund, even if that means having two separate funds (which effectively is how I do it).

My bond funds are:
Invesco Perpetual Corporate Bond (Sterling Corporate Bond)
Old Mutual Global Strategic Bond (Sterling Global Bond)
AEGON High Yield Bond A (Sterling High Yield Bond)

Different risk ratings, different yields, different growth rates.

Cazenove Multi-Manager Global (ex-UK) Acc (Global Large-Cap Blend Equity)
Most recent total expense ratio = 1.93% - that looks fairly pricey.
I'd take a look at the following comparison in the Morningstar fund compare tool:

Jupiter Merlin Growth Portfolio Acc
M&G Global Growth A Acc
Cazenove Multi-Manager Global (ex-UK) Acc

They are all Global Large-Cap Blend Equity funds, but the historical performance differences are fairly significant. However, I will accept that the Jupiter fund's expense ratio of 2.55% is somewhat off-putting. M&G's is a much more pallatable 1.69%.

HSBC Pacific Index Acc (Asia-Pacific ex-Japan Equity)
Good to go into an ex-Japan fund. You don't want Japan's stagnant performance watering down all of that tasty Asia-Pacific goodness. Not sure about the HSBC fund though. Compare it with:

Aberdeen Investment Asia Pacific Fund A Acc
Fidelity South-East Asia
First State Asia Pacific Leaders A Acc

My funds in this area are:

First State Greater China Growth A (Greater China Equity)
Invesco Perpetual HongKong and China (China Equity)
First State Asia Pacific Leaders A (Asia-Pacific ex-Japan Equity)
Jupiter China (China Equity)

Yes, there's overlap, but the actual fund values are relatively small in the grand scheme of things, and while I will almost certainly make future consolidations, right now they are all performing admirably and I have a big smile on my face.

Invesco Perpetual Corporate Bond Inc
I have this fund, and have told others about it in the past. I have no doubt that, over the long term, it provides a satifactory growth and yield.

Invesco Perpetual High Income Acc
Trailing Returns at 31/12/2009
YTD 9.81%
3 Years Annualised -1.81%
5 Years Annualised 8.88%
10 Years Annualised 9.37%
12 Month Yield 4.79%

A fairly high yield, but poor growth in 2009, actually the poorest growth of all of the UK Large-Cap Value Equity funds with decent yields I searched.

Compare with Schroder Income Inc:
Trailing Returns at 31/12/2009
YTD 35.41%
3 Years Annualised 1.67%
5 Years Annualised 8.01%
10 Years Annualised 7.03%
12 Month Yield 4.98%

and Investec UK Special Situations A Inc Net (admitedly a much lower yield):
Trailing Returns at 31/12/2009
YTD 37.57%
3 Years Annualised 1.26%
5 Years Annualised 8.11%
10 Years Annualised 6.87%
12 Month Yield 2.97%

In the end you have to balance off your perception of the value of the yield against its long-term growth potential. I don't think it's a bad fund - and neither do Morningstar - it has a 5-star rating - but it has definitely had a below-par year.

JPM Natural Resources A Acc (Sector Equity Natural Resources)
I squared off JPM Natural Resources against First State Global Resources for one of my specialist funds in 2010, and it was a close call.

Morningstar say of JPM: "For investors who can handle its extreme risks, we think JPM Natural Resources is one of the best at what it does."

"In the end, the only question is whether investors can live with the near-term risks such positions imply. Those who can't should steer clear. For others, though, we believe this offering is among the category's best. It earns our top rating of Elite."

"The fund is well priced for a dedicated resources offering with strong backing."

Morningstar say of First State: "First State Global Resources builds a strong case for investors seeking resources exposure."

"Sector funds like First State Global Resources should ideally be a niche play. That being said, if you are looking for resources exposure First State deserves serious consideration."

"The fund is cheap compared to the category median."

In the end, despite the higher Morningstar Rating of the JPM fund, I went with First State because the overlap with my other mining/resources fund, BlackRock Gold And General was higher with the JPM fund.

Historical performances are similar at the five-year point, and both performed spectactularly this year:

JP Morgan Natural Resources A
Trailing Returns at 31/12/2009
YTD 95.64%
3 Years Annualised 10.29%
5 Years Annualised 20.48%
10 Years Annualised 21.75%

First State Global Resources A
Trailing Returns 31/12/2009
YTD 70.43%
3 Years Annualised 15.70%
5 Years Annualised 21.47%
10 Years Annualised - unavailable

My opinion - good pick.
Portfolio overlaps - none that I can find.

Jupiter Financial Opps Inc
Trailing Returns at 31/12/2009
YTD 11.91%
3 Years Annualised 6.95%
5 Years Annualised 13.66%
10 Years Annualised 15.44%

The fund's blurb... "The objective is to achieve long-term capital growth principally through investment in equities of financial sector companies on an international basis. The investment policy is to invest in a concentrated, international portfolio. The Fund will principally comprise of financial services companies..."

Roughly 8.9% of the fund is composed of Barclays PLC, which has dropped from 383 mid-October to 276 yesterday.

Roughly 7.7% of the fund is composed of Bank of America Corporation, which has dropped from 18.59 mid-October to 15.06 yesterday.

I could go on...

Personally I wouldn't touch a fund like this with a 10-foot-stick because I have no idea what the financial markets, investor sentiment, and government actions are going to do to the share values of financial organisations.

Jupiter India Fund Acc
This fund has only been around a few months since it was only started 29/02/2008, but its performance this year is the best of all of the 9 funds in the Morningstar India Equity category.

Personally I'd never noticed this fund before, but given that it has a buy-in of only £500, you might have given me an idea for 2010.

Good pick!

Jupiter Int'l Financials
"The Jupiter International Financials Fund aims to achieve long-term capital growth principally through investment in equities and equity related securities (including derivatives) of financial sector companies on an international basis."

This fund is only about 18 days old at time of writing. No performance data to go on, and a tumultuous sector.

Argh! *runs for cover*

Threadneedle UK Property Trust Acc
Argh! *runs for cover some more*

There are two sectors that I do my absolute level best to keep my money out of:

Japan and Property

I with you the best with this one, but all I can guess for you is that you are expecting a fundamental realignment of the UK property market. Kudos to you if it happens, but I'm not holding my breath, and neither should you.

Just as an indicator of the dismal state of the property investment fund market, here's a list of the property funds with three-year annualised performance data:

Standard Life Intl Overseas Equi... -1.65%
Capital Financial Canlife UK Pro... -4.25%
Royal London Exempt Property Acc -5.72%
Legal & General UK Property Trus... -6.16%
Ignis UK Property Acc -8.28%
Standard Life Inv UK Property I -8.31%
Standard Life Inv UK Property R -8.91%
Scottish Widows Investment Partn... -9.91%
Skandia Investment Management Pr... -11.68%
CGU Life Property UL -11.72%
New Star UK Property A Acc -12.55%
Threadneedle Property Acc -12.75%
Hermes Property Unit Trust -13.38%
Aviva Investors Property Trust Acc -14.54%
ZI Norwich Property Trust -15.41%
Rockspring Hanover Property Acc -18.64%
TRI European Residential Propert... -23.38%
Tilney British Real Estate B Acc -70.16%

That's 18 funds - EIGHTEEN FUNDS - and not one of them can manage even single-digit positive growth in three years.

At the five-year point, eight of the above funds provides performance data, and ALL EIGHT are negative.

At the ten-year point, four funds provide performance data, one is negative, the three positives are 0.2%, 2.84%, and 4.03% annualised.


Disclaimer - all of the above is either freely available fund information, or else is the long-winded and opinionated blithering of somebody with too much time on their hands this New Year's Day. No financial advice has been provided or intended in the above communication.

Ian_W

QuietDragon wrote: »

Jupiter Financial Opps Inc
Trailing Returns at 31/12/2009
YTD 11.91%
3 Years Annualised 6.95%
5 Years Annualised 13.66%
10 Years Annualised 15.44%

The fund's blurb... "The objective is to achieve long-term capital growth principally through investment in equities of financial sector companies on an international basis. The investment policy is to invest in a concentrated, international portfolio. The Fund will principally comprise of financial services companies..."

Roughly 8.9% of the fund is composed of Barclays PLC, which has dropped from 383 mid-October to 276 yesterday.
Roughly 7.7% of the fund is composed of Bank of America Corporation, which has dropped from 18.59 mid-October to 15.06 yesterday.
I could go on...
Personally I wouldn't touch a fund like this with a 10-foot-stick because I have no idea what the financial markets, investor sentiment, and government actions are going to do to the share values of financial organisations.

I thanked you because it's a very comprehesive response for the OP. However, Lemon may want to remind themself of their previous thread:
http://forums.moneysavingexpert.com/showthread.html?t=2096055&highlight=jupiter+financial+opportunities

Gibbs IMO is an excellent manager, when did he buy Barclays & BOA?

The trouble with over reliance on past performance, you'll almost always buy high, sell low. In that regard I have money in Japan and am getting to the stage of considering property, what's low doesn't have to go higher but by the same token an area or sector that's done really well might not continue in that direction.

lemon26

Hi QuietDragon, thanks again for your time and very comprehensive post. I'm going to take a few suggestions and I'll be looking into switching my the HSBC fund possibly and possibly from the Cazenove Multi-Manager into the M&G Global Growth or Jupiter fund that you mention.

I bought the Financial Opps fund on Gibbs' reputation and track record but I feel I may have bought too high - I will keep with this fund and the Int'l Financials Fund as I have faith in his skills. I will also be keeping the property fund, but re-aligning it in my portfolio from a core holding to a niche one of less than 10%.

I've picked the Artemis Fund on the manager's previous record so we'll just have to see on that one. I had looked at the Aegon High Yield bond, would that be a good place for maybe 5-10% of my portfolio? Didn't know if it was too risky?

Thank you once again for your very comprehensive post and any thoughts you have on this post please keep them coming! Cheers, L

Rollinghome

QuietDragon wrote: »

Invesco Perpetual High Income Acc... I don't think it's a bad fund - and neither do Morningstar - it has a 5-star rating - but it has definitely had a below-par year.

It's a good illustration of how careful anyone should be about judging a fund on a single year's performance figures - or any historical figures. If you relied on the figures for the last 10 years as indicative of the next ten then you wouldn't be in equities at all.

If you compared the fund last year with say M&G Recovery, run by another 'star manager', you'd see that for every year but one it beat Recovery. By March it was still ahead. But had you invested on that basis then, now 9 months on you would appear to have lost out. The past is easy, the difficult bit is knowing what the next 9 months will bring.

The Woodford fund is heavily defensive with a huge wadge in pharmaceuticals and tobacco so it largely depends on how smooth you expect the months ahead to be.

kavomix

ses6jwg wrote: »

Is there a tool people are using to work out the percentages in their portfolio?

Hi Ses6jwg,

I use trustnet to log my portfolio. It has an area where it breaks down your holdings percentages along with showing gains (summary tab). On the profile tab it has an area that shows the breakdown of your portfolio and where your investments lie, i.e. North America, Asia...equity, fixed interest..

and best thing...its free :T

lemon26

Hi again, having taken on board what has been said, would my portfolio benefit from adding the Aegon High Yield Bond, around 10%, and switching from the Cazenove MM into the M&G Global Growth discussed above?

I bought into the Artemis Fund because of the manager's previous record and it is aimed to protect in down markets - but does this mean that it's a jack of all trades and a master of none? What are people's thoughts on this fund and similar ones? Should I have it whilst I've got seperate bond funds and a UK equities fund too? Thank you, L

Ian_W

lemon26 wrote: »

I bought into the Artemis Fund because of the manager's previous record and it is aimed to protect in down markets - but does this mean that it's a jack of all trades and a master of none? What are people's thoughts on this fund and similar ones? Should I have it whilst I've got seperate bond funds and a UK equities fund too? Thank you, L

It isn't just Bonds though, according to the fund FACTSHEET it includes commodities, currencies and taking short as well as long positions on these. Whether it will prove to be a "master of none" only time will tell.

I hold similar funds (multi-asset) in different IMA sectors (balanced and cautious) for exactly the reason you chose this fund, to act as a damper when stock markets fall - they have, by and large, done that to a degree. However, my wish for capital preservation may be much greater than yours.

There is no hard and fast rule that I'm aware of that says you should hold equity and bond funds separately - QuietDragon takes that view, I take a different view, neither is right or wrong - just diffent opinions, probably cos of different goals so you have to decide for yourself. If your aim is still to provide downside protection, what's changed?

lemon26

Hi Ian! With regards to the Artemis fund, nothing has changed as to downside preservation, I'm totally new to investing and don't know if it is right to have this fund as the 2nd largest holding with large equity overlaps with my largets holding, the IP High Income fund.

Time will tell and it hasn't been doing badly for me. I want to have some balance as I don't want to have all equities in my portfolio, hence the multi-asset fund, bond fund and property fund.

Thanks again for your time! L