ISA - Balanced?

langtoft_lad

Would appreciate any comments on the balance of my stocks & shares ISA portfolio. Especially if I'm blatantly overweighted or under-invested in any particularly area.

30% UK All Companies Equities
25% UK Equity Income & Growth
12% UK Corporate Bonds
10% UK Gilts
10% Property
10% Actively Managed
03% Speculative Punt

I pay in a regular monthly amount into unit trust funds.
I suspect too much into UK equities? Do I need to spread the risk a bit more? There's about £20k in it at the moment.

I understand you can't give advice on specific funds

barny_100

I'll ask the questions I know other people will ask

How old are you or put another way when do you want to retire (Assuming the investments are for retirement of course), what's your attitude to risk etc etc. It looks like a medium spread at the minute with perhaps that excessive UK weighting actually adding risk? Also if you already have a mortgage do you need 10% in property as well?

IMO you might like to look at quality Asia-Pacific (ex Japan prob)? and Global Emerging Markets funds and pick one of each. Put 10% in each and you'd immediately have a more diverse spread. "Riskier" in theory but likely better returns long term as well. Sure the pro's can do better but for a quick improvement I think that's fair.

langtoft_lad

Retirement - I can't really answer that except for the vague notion of the sooner the better!
It is because I'm thinking the UK is riskier in the short term that prompted the post.
I don't have a mortgage, and the rationale for property is for recovery.

I like the idea of Asia-Pacific and/or Emerging Markets so will think on that...

Do I get the impression your view is to tweak the balance rather than wholesale slash & burn?

barny_100

langtoft_lad wrote: »

Retirement - I can't really answer that except for the vague notion of the sooner the better!
It is because I'm thinking the UK is riskier in the short term that prompted the post.
I don't have a mortgage, and the rationale for property is for recovery.

I like the idea of Asia-Pacific and/or Emerging Markets so will think on that...

Do I get the impression your view is to tweak the balance rather than wholesale slash & burn?

Retirement - fair enough but is it ~10 or 20+? Doesn't have to be exact, just the longer it is away the riskier you should be now IMO as short/medium term volatility is not a concern.

You misunderstood me I think, we are in agreement! I meant the areas were what I think are textbook "Medium risk" but in fact the UK State finances are such that those classifications might need adjusting. It could be debt free Emerging Markets that get pigeon holed as high risk are not so risky long term in that light? All opinion so DYOR

I'd ignore what your % allocations are now and start from scratch till you have something adding up to 100% you are happy with then buy/add/sell fund units to fit. It may be some are the same % as now but don't let inertia affect your decision making.

langtoft_lad

I'm uncomfortable with what my allocations are presently - hence seeking opinions.
Unfortunately anticipated retirement is no help really - earliest is 3 years, latest is... well, probably 15 years. TBH that decision will probably be ruled by other than financial factors.

But it's informative that at least one other person thinks investing in UK market might be veering from medium to high risk.
I think I'd like to reduce my exposure from 55% to around 40% but I want to canvas wiser heads than mine - good idea or mental?

dunstonh

I'm uncomfortable with what my allocations are presently - hence seeking opinions.

You are investing like an American. Very inward looking and forgetting that you should look globally.

But it's informative that at least one other person thinks investing in UK market might be veering from medium to high risk.

No more than currency fluctuations you would get if you went global.

You are also mixing and matching targeted funds with active managed funds. Its best to do one or the other. Not fudge it with both. If you are going to be a lazy investor then go with portfolio funds (like fund of funds that self balance) but if you intend to do your own rebalancing then use targeted funds (i.e. a fund in each sector).

langtoft_lad

Dunstonh
I really appreciate your input as it was your advice to others which made me realise I should do something with my ISA, which up until six months ago was the ultimate lazy investor's 100% in a Nationwide All Share Tracker - at least I've made some steps towards diversification.

I'm receiving a mixed message though?

You are investing like an American. Very inward looking and forgetting that you should look globally

but

No more than currency fluctuations you would get if you went global

Should or should I not look outward?
Are you saying both have similar (but different) risk, nontheless diversification & balance suggests I should consider beyond the UK?

I may also misunderstand your terminology as regards Active funds - it's my impression that all my funds (other than the tracker) are 'actively' managed in their targeted area. Perhaps my classifications weren't helpful - I was trying to avoid mentioning specific fund names as I know opinion shouldn't be sought.

Would you agree with Barny_100 that transferring a percentage of my FTSE tracker into an Asia/Pacific fund would be a balanced move?

dunstonh

Should or should I not look outward?

I would say yes as certain parts of the world are going to grow at different rates. Dont be afraid to put 3-5% in higher risk areas as long as the overall spread averages out to match your risk profile and you must rebalance if you do that. Dont let it go too far out of sync as you need to protect profits at certain points.

I may also misunderstand your terminology as regards Active funds - it's my impression that all my funds (other than the tracker) are 'actively' managed in their targeted area. Perhaps my classifications weren't helpful - I was trying to avoid mentioning specific fund names as I know opinion shouldn't be sought.

Active in this case is a the fund manager choosing the sector allocations and amounts or you doing it. Not as in active vs tracker.

Would you agree with Barny_100 that transferring a percentage of my FTSE tracker into an Asia/Pacific fund would be a balanced move?

its a start but he worlds a big place. There are other regions to include.

langtoft_lad

Thanks - small cautious steps is what I'm happy with - and it's not a large amount of money to spread around.

Jake'sGran

I have been investing in Asia, China and India recently and have been impressed with the gains, particularly on the Asia OEIC. After doing some research a few weeks ago I also put a smallish amount in the Allianz BRIC fund. Apart from these I opened 2-3 years ISAs in Invesco Perpetual income funds which were enormously popular but the manager's preferred system seems to have stalled in recent times.

Old_Wrinkly

barny_100 wrote: »

I'll ask the questions I know other people will ask

Well, you didn't ask the question that I would have asked.

What is the point of an ISA sub-board if people don't use it for ISA threads?